Before leaving wage and hour issues, we would be remiss if we did not mention the Employee Misclassification Prevention Act. This legislation would amend the Fair Labor Standards Act to require employers to keep records of non-employees who perform labor or services for remuneration and would impose a special penalty on employers who misclassify persons as non-employees. Over the last several years, spurred by such high-profile cases as the ones against Federal Express, increased attention has been given to the classification of independent contractors, temporaries, and the like. Taxing authorities and the courts have been scrutinizing an employer’s assertion that certain persons are not “employees” entitled to the full benefits of its other employees (e.g., wages with appropriate withholdings taken, employer-sponsored benefit plans, etc.). This law would increase the responsibilities of employers to ensure that persons who are employees are compensated as an employee, not an independent contractor.

Even if this law were not to pass, you can expect the heightened scrutiny to continue. If you are treating certain persons as non-employees and you believe it is a close call, you should consult qualified legal counsel to help you assess the situation before your “non” employee sues you or the government comes calling for back withholdings.

By Kristen L. Brightmire, kbrightmire@dsda.com