The DOL just released guidance on the danger of misclassifying employees as independent contractors. It’s an important topic. Misclassifying employees can lead to large penalties, including back taxes, unemployment insurance, workers’ compensation, civil and criminal penalties, and more. Now is the perfect time to review your worker classifications. The DOL will examine several factors when determining whether a worker is an employee or an independent contractor. But the fundamental question is whether the worker is really in business for themselves (which makes them an independent contractor) or is economically dependent on the employer (which makes them an employee). Keep in mind that most workers are considered employees under the Fair Labor Standards Act’s broad definition of an employee. Employers should take the DOL’s new guidance seriously. The penalties for misclassification are steep.