New Hampshire Added To List of States Cracking Down on Contractor Misclassification

New Hampshire can now be added to the list of states (including CA, NY, and MA), putting together special task force initiatives to crack down on improper contractor classification.

As reported in today's Nashua Telegraph:

"Labor Commissioner George Copadis said Wednesday his department has received enough complaints about the practice that it is has teamed up with four other state agencies, including the attorney general’s office and the Department of Revenue, to look in to how big the problem really is.

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Rep. McDermott introduces new worker classification legislation

Turning up the heat:

Proper classification of contractors and employees continues to hit the headlines on a regular basis, and the latest news is the release of yet another legislative effort to eliminate worker misclassification and help state and federal tax agencies recover more revenues without raising taxes. Representatives McDermott, Tierney, and Neal introduced The Taxpayer Responsibility, Accountability, and Consistency Act in session yesterday. Adding fuel to the fire, the labor Unions have issued a variety of press releases today praising the measure. The Unions argue that misclassification as contractors prevents workers from being able to join and therefore infringes on their right to organize.

Granted that this is an election year and a variety of powerful lobbies (and not just the unions) are interested in passing this kind of legislation, interest and pressure in the topic of worker classification will only increase in the coming months.

We'll be adding this bill to our Legislation Tracker page as soon as it becomes available on GovTrack, so stay tuned to these pages!

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MA Governor Cracks Down on Misclassification

One by one, the states are turning up the heat on independent contractor classification. On March 12, 2008, Mass. Governor Deval Patrick signed Executive Order 499 creating a joint task force to identify and crack down on illegal misclassification of workers as independent contractors.

"Through joint efforts, the Task Force is charged with combating the underground economy and employee misclassification, including efforts to: (a) foster compliance with the law by educating business owners and employees about applicable requirements; (b) conduct joint, targeted investigations and enforcement actions against violators; (c) protect the health, safety and benefit rights of workers; and (d) restore competitive equality for law-abiding businesses."

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New GAO Report: Contractors as Contract Specialists

The GAO released a new report yesterday highlighting the use of contractors to serve as defense contract specialists, managing procurement. In just a few short years -- since 2003 when the Center for Contract Excellence (CCE) began using contractors in this role -- their contractor population has swelled to 42% of CCE's contracting force.

Get the report here:

GAO-08-360 Defense Contracting: Army Case Study Delineates Concerns with Use of Contractors as Contract Specialists

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Obama's IC Bill Still In Committee

Senator Obama's Senate bill confronting independent contractor classification is currently in the Senate Finance Committee. In case you haven't been tracking this issue, the bill was introduced last September and would allow the U.S. Treasury to wield a whole lot more power than it currently does. In one sense it would 'take the muzzle off' the dogs of enforcement. In addition, the bill will also eliminate the "everybody's doing it" defense of industry practice as a justification for worker misclassification.

If the bill becomes law, it would dramatically shift the landscape of contractor classification. Industries known to habitually misclassify workers would be fair game for investigation, and information for workers about proper classification would be added to the Department of Labor's workplace signage to help make sure every worker understands their labor rights.

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Intuit Future of Small Biz Report

The third installment of the Intuit Future of Small Business Report has arrived. A wonderful read, and all three papers in the series are worth consideration.

Download the paper, The New Entrepreneurial Economy.

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White Paper: Assessing and Managing Risk

Download this MBO White Paper on Assessing and Managing Risk in Contingent Workforce Management.

Up to date analysis and best practices for engaging 1099s and independent consultants, freelancers, small services suppliers, and so on. Avoid IRS reclassification of contractors to employees.

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Webcast on Chimes Downfall

This one hour webcast will profile the shocking Axium / ECG bankruptcy.

Panelists include Doug Leeby, SVP of Beeline, the firm that purchased the Ensemble Chimes Global assets, who will be discussing Beeline and MPS Group's decision to step in as well as their plans for the future. Representing the client side, Jeffry Kostic of Horizon Blue Cross Blue Shield of New Jersey will speak to his experience as that company's program sponsor for the ECG VMS program. Guests also include Kip Wright (COMSYS), Ben Walker (ProcureStaff), Scott Fraleigh (Guidant Group), and Gene Zaino (MBO Partners). Not to be missed!

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Fedex Owes $319 million

IRS says Fedex owes $319 mln
in back taxes: filing
Reuters

Friday, December 21, 2007; 9:30 PM
LOS ANGELES (Reuters) - Fedex Corp (FDX.N)
said on Friday that the U.S. Internal Revenue
Service found that its FedEx Ground independent
contractors should be reclassified as employees
for tax purposes and that the company faced
related taxes and penalties of more than $319
million for 2002.

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