Employee Vs. Independent Contractor Essay

887 Words Dec 25th, 2016 4 Pages
Employee Versus Independent Contractor
Introduction

To contract or not to contract workers, is the question. What is the real reason the IRS is conducting independent audits on companies who have independent contracted workers? The Equal Employment Opportunity Commission (EEOC) rules determines if the status of a worker is an employee or an independent contractor and in accordance to the common- law agency principles. The Department of Labor (DOL) audits organizations and violation of the discrimination laws result in organization’s needing to minimal legal risk that will result in state and federal employment laws compliance in properly classifying contingent workers. This paper will discuss the government’s interest in workers being properly classified (employees versus independent contractor), payroll and benefit obligations, and IRS regulation when organizations utilize “contingent workers”. MEMORANDUM OF POINTS AND AUTHORITIES
AUGMENTATION SHOULD BE ORDERED TO OFFER BENEFITS
TO RECLASSIFIED CONTIGENT WORKERS

Statement of Facts During an IRS audit, it was determined that temporary staff were misclassified as “contracted workers”, that should have been classified as “employees”. Under the Fair Labor Standards Act, the Department of Labor has provided a 15- page memo guideline on Wage and Hour Division that makes it harder for employers to utilize independent contractors, even with a contracted agreement. The guidelines enforce the Fair Labor Standards Act and…

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