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July 14, 2015In the News

Rumbaugh quoted in "Honest Mistake or Risky Decision?"

Human Resources Executive Online

Human Resources Executive Online quoted Michael Best Partner Eric H. Rumbaugh in the article "Honest Mistake or Risky Decision?" on July 14, 2015.

"Rumor has it that the U.S. Department of Labor will soon issue new employer rules for classifying workers as either employees or independent contractors. Roughly 10.3 million people in this country work as ICs in all sorts of jobs, from truck drivers to IT specialists, according to the latest figures from the 2010 U.S. Census.

Although the DOL and IRS have posted online tips and tests on how to distinguish between the two types of workers, misclassifications still occur—sometimes intentionally.

Reasons vary, ranging from time constraints—i.e., I need someone now—to budget freezes. ICs cost less than traditional employees because employers don’t pay independent contractors’ employment taxes and benefits.

Some attorneys and HR consultants believe that workers will file more class-action lawsuits over their employment status and, to avoid losing billons of dollars in uncollected tax revenue, state and federal governments will crack down hard on employers that misclassify workers. Either way, HR should never be on the wrong end of the stick, and needs effective processes in place to help ensure workers are appropriately classified."

To view the full article, click here.

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