Do you employ independent contractors? Are you sure they qualify as “independent?” The DOL estimates that between 10% and 30% of employers misclassify their employees and independent contractors. Misclassification can result in minimum wage, overtime, and FMLA violations. You can find the duties tests here: US Department of Labor.
Case Study
Companies often misclassify employees because of the additional costs and expenses typically related to employees. However, misclassifying employees leaves the employer open to litigation, a tarnished reputation, and costly fines.
An investigation by the DOL found Minnesota-based Cable Equipment Services violated FLSA overtime, minimum wage, and recordkeeping requirements when they failed to pay 41 market contractors and drivers overtime and minimum wage. The company treated the workers involved as independent contractors instead of employees. However, investigators found that the workers met the definition of employees. The defendants agreed to pay $350,000 in back wages and liquidated damages.
Employers should carefully review their independent contractors to determine if any of the workers should be classified as employees.
The Solution: Automated Time and Attendance
Automated time and attendance minimizes much of the administrative and regulatory burden of classifying workers, tracking work time, and maintaining compliant records.
Tools include:
- Employee classifications
- Automated timekeeping
- Audit-ready recordkeeping
Automated Time and Attendance for Compliance Confidence
Our time and attendance solution provides an easy and effective way to maintain compliance with a variety of challenges that cause trouble for many employers.
Ready to up your game when it comes to compliance? Give us a call. Call 941 Payroll today at (877) 941-9419.
