The U.S. DOL Warns Employers That Most Workers are Employees – Not Independent Contractors
The United States Department of Labor (DOL) issued an Administrator’s Interpretation on July 15, 2015, warning employers against misclassifying workers as independent contractors rather than employees under the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. (Practically speaking, if a worker is an employee under one law, he or she must be treated as an employee for all purposes). The DOL explains that when employers improperly classify workers as independent contractors as opposed to employees, the worker does not receive important workplace protections such as minimum wage, overtime compensation, unemployment insurance, and workers’ compensation. The DOL also notes that misclassification results in lower tax revenues for the government and an uneven playing field for employers who properly classify their workers as employees.
