Regulators Crack Down on Classifying Workers as Contractors

[alp227]

by Jennifer Smith for Monday's Wall Street Journal

A crackdown on businesses that treat some workers as independent contractors is causing a stir in industries from trucking to exotic dancing.

At issue is whether the companies improperly classify employees to avoid paying overtime and payroll taxes.

In recent months, regulators have demanded millions of dollars from companies that hired independent contractors to hang drywall, install cable, staff call centers, give manicures and perform other jobs in which the government said workers were really functioning as company employees.

Some companies are pushing back. Last month a Texas oil-field-services company scored a rare legal victory against the Labor Department, which claimed that the company owed more than $6 million in back pay to its independent contractors.

"We felt we were right from the get-go," said Bert Steindorf, founder and chairman of Gate Guard Services LP, which based in Corpus Christi. The company hires contractors equipped with their own recreational vehicles to monitor gate traffic at remote energy and construction sites.

Gate Guard sued the Labor Department in federal court in 2010 after the agency told the company to reclassify its gate attendants as employees and pay them back wages. A federal judge ruled that the workers were independent contractors and dismissed the department's enforcement action.

(For the full article do a web search for the article title; URL for your reference is at http://online.wsj.com/article/SB10001424127887324539404578338290451239634.html)

[nolabels]

1. A federal Judge obviously picked and installed by republicans

Nothing will get done till we stand on our hind legs and demand it

[TheMastersNemesis]

2. Corporate America Wants All Workers To Be Independent Contractors In The Future.

The next move for big business is to end the full time job and replace it with contract or contingency workers.
Granted the Dept of Labor has won some cases on this matter. By putting in pro business judges and defunding or devolving federal authority to the states business can move into this new model for workers.

The attack on regulation and the union movement is part of this broad based strategy to move the labor market to a "brave new" world. This model was part of the Reagan revolution. The Labor Department actions show how widespread the effort is for business to no longer pay payroll taxes and make employees responsible for them on the fixed pay they will get in the future.

The things that are going on now in business will be the "no job jobs of the 21st century. There was discussion of an employee free corporate zone in the early 1980's. The job as it is known will cease to exist under this new business model.

[pipoman]

4. I don't see any loosening of

IC rules anytime soon. Government knows that 1099 workers have a much lower probability of filing/paying taxes and withholding. I have believed for a long time that if more people had to write the check for their taxes, as opposed to withholding, there would be not only low collection rates but also more public scrutiny of government spending...they want neither..

[pipoman]

3. Independent Contractor status has very specific guidelines

which are a bit difficult to comply with, and are often violated in the real world. One example of this would be; If I own a car lot and my sales people are IC, I cannot tell them what time they must be at work or leave work making it incredibly difficult to be sure someone is there at all needed times. I also cannot dismiss anyone for not being there at a stated time. There are many rules like this which if not followed exactly makes the contractor an employee due wages, withholding, and benefits. The IRS often audits businesses who submit a lot of #1099s as tax deductions and large amounts of the recipients of the 1099s are not filing taxes.

[TheMastersNemesis]

5. I Know The Guidelines Are Very Specific. I Worked For DOL 24 Years. However-

the entire push against regulations, Department of Labor, unions, worker rights and employer push back is about removing federal regulations that govern employment. The Fair Labor Standards Act has been under attack since Reagan.

The GOP and big business push is to reduce employment to a contingency or contract employee level. Temp agencies have grown tremendously over the years. There are many more temp and contract jobs than there have ever been. The tendency in the employment market has been to reduce hours and cut full time jobs to bare minimum in corporate American.

There most likely fewer full time jobs compared to part time, temp and contract jobs per capita compared to when Reagan was president. One reason the UI rate stay so high is employers are still quietly offshoring more and more jobs and reducing full time jobs to part time jobs.

The employment stats hide the true picture of the situation because UI stats are very limited in their scope. The survey for UI counts a person with 1 hour of work in a week as employed. It does not count people who have given up, and people off benefits. If we counted the rate like the Europeans do our rate would be around 12% to 15%. Plus the UI rate does not account for underemployment. That rate is most likely closer to 50%. Underemployment is pay less than experience or education demands. We have lot of degreed people working low wage jobs or part time jobs or service jobs.

The point of my post is that in the early 1980's there was info out at DOL where corporate American issued white papers about the NEW job market meaning that there would be NO full time jobs in the future. All jobs would be contract or contingency based. The corporations are trying to move the work force into that model.

One symptom of their strategy is convincing workers that they will have multiple careers of as many as 8 or 10 jobs that they must continually train for at their own expense. I am seeing this model progressing just like those white papers predicted in the early 1980's.

That is why the safety net, taxes, Medicare, Social Security, labor laws, unions etc are under attack and being eroded. The MSM and the corporations are trying to move the work force to accept this new model that workers really do not even see.]
It is the "boiling frog" scenario. Moving workers and conning them.