Now more than ever, Florida employers should ensure they are properly classifying their workers.The U.S. Department of Labor and the Florida Department of Revenue have announced an agreement between the two agencies to prevent the misclassification of workers as independent contractors rather than employees. The DOL's January 13th press release explains the significance of proper classification:
Business models that attempt to change or obscure the employment relationship through the use of independent contractors are not inherently illegal, but they may not be used to evade compliance with federal labor law. Although legitimate independent contractors are an important part of our economy, the misclassification of employees presents a serious problem. Independent contractors are often denied access to critical benefits and protections, such as family and medical leave, overtime compensation, minimum wage pay and unemployment insurance, to which they are entitled. In addition, misclassification can create economic pressure for law-abiding business owners, who often find it difficult to compete with those who are skirting the law.
So how will the agencies' collaboration prevent worker misclassification? By sharing information and coordinating enforcement efforts, according to the DOL's "Employee Misclassification" web page. This dual-agency enforcement approach is likely to increase the risk and potential cost of misclassifying employees. Employers that misclassify employees may be liable not only for overtime compensation, but also FICA and unemployment insurance taxes, and workers' compensation premiums.
Employers that are uncertain about the proper classification of their workers should consult the DOL's guidance and the Florida Department of Revenue's guidance on the issue. Employers that remain uncertain about the classification of their workers should consider consulting a qualified employment lawyer.