Worker Classification
There are stories everyday about fines being placed on businesses throughout the country because of worker misclassification. The DOL fines are staggering. And not only large organizations are being audited but small to medium size companies as well. Let’s take some of the mystery out of worker classification. Understanding the nuances of worker classifications can help companies build the right mix of talent.
Employment Status
A person’s employment status is determined by how much control the employer has over the worker.
Whether it includes employees, independent contractors, or both. Businesses need to classify ‘employees’ as full-time, part-time, or temporary. Companies could also have independent contractors (freelancers, gig workers or contingent workers) performing projects. The classifications determine a variety of things. It determines how the worker will be paid, what benefits the worker may be eligible for, and which tax forms will be used to report that income.
Classifying
Employees usually are classified according to the hours worked and the expected duration of the job. Accordingly, they generally fall into three major categories: full-time, part-time, and temporary employees. An Independent Contractor (IC) is self-employed and is responsible for their own tax obligations. The general rule is that an individual is an independent contractor if the ‘payer’ has the right to control or direct only the result of the work, not what will be done or how it will be done.
Misclassification Demystified
Employee misclassification occurs when an employer incorrectly classifies a worker as an independent contractor instead of an employee. When this happens, the worker misses out on benefits, protections and overtime pay. And the government misses out on taxes paid by the employer for the employee.
New DOL Ruling
A February 2023 article in BND examines the new DOL proposal regarding the revamping of the employee classification and could affect 50 million Americans. Who counts as an employee versus an independent contractor may be about to change, as a new DOL proposal suggests. The rule change could have wide-ranging implications for employees, freelancers, and employers alike and could dramatically alter the shape of the gig economy as we know it…
Cardinal Staffing Services – Your Staffing Partner
We take great pride in our leadership role within the staffing industry now for decades. That role allows us to help our candidates and business customers. Cardinal Staffing Services helps to expand our valued partners’ operations, aid in building a better quality of life and future for our candidates across all skill sectors.
Whether you are a company looking for employees OR a candidate looking for work we have you covered. For more details, reach out to your local Cardinal Staffing office to hear more about current offerings or for job postings – we’re here to help!