1099 Risk Blog

Leadership Excellence in Government Highlights Federal Hiring Reform and Insourcing

The new issue of the Leadership Excellence in Government highlights the latest issue among government talent and HR executives: hiring reform. Ever since a May 11 memo by President Obama, Federal talent leaders have been scrambling to change hiring practices to radically transform the way agencies engage talent. These changes come on the heels of another memo, the in-sourcing initiative, which has put pressure on the federal departments to evaluate what work is outsourced to contractors (including independent contractors, government integrators, consulting firms, and other services vendors) and to make changes in order to maintain the integrity of the . . .

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New Study Results: Secrets of Successful Contingent Workforce Management Programs

According to the Aberdeen Group, the use of contingent labor -- including independent contractors, SOW consultants, and temporary employees hired on a contract basis -- has increased 20% over last year. Clearly, contract labor is in demand as companies struggle to emerge from the recession. But this increase in the use of contingent workers presents challenges, too. Costs can spiral out of control, the quality of the talent can suffer, and businesses can become exposed to tremendous risks should the use of the contingent workforce fail to meet compliance and regulatory requirements . . .

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Leveraging Independent Contractors in the Workforce Mix - Upcoming Webcast

The writing is certainly on the wall: as America emerges from the Great Recession into an uncertain economic recovery, things are going to be different in the "new normal." It's not that the economic recovery is a completely "jobless" recovery. It's more that work doesn't get packaged as jobs so much anymore. Work is being bundled into projects, and then services are being purchased from providers or services vendors. Some of those vendors are individuals hired as independent contractors or SOW consultants . . .

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Contingent Labor Brings Significant Savings, Research Finds

As we settle in for an uncertain and lumpy economic recovery, everyone is looking for savings. And the word on the street is using contingent labor -- defined broadly to include staff augmentation, independent contractors, SOW consultants, and temporary workers -- saves businesses money. But conventional wisdom isn't always right. As Edward Deming once said, "In God We Trust, all others bring data." Staffing Industry Analysts just published their data benchmarks with the following statistics for annual savings attributed to the contingent workforce . . .

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A Workforce in Flux: Contract Jobs Go Up, While Jobless Claims Continue to Rise

This week's economic data confirms the trend toward a more flexible contingent workforce:

The United States workforce is in flux, and the work that used to be performed on a so-called "permanent" basis is increasingly being met with contract labor.  According to MarketWatch, the initial unemployment claims for the week ending June 26th rose by 13,000, or nearly 3% from the previous week. At the same time, according to the latest BLS figures (reported by Staffing Industry Analysts), the US economy added 20,500 temporary jobs in June, for a total of 2.1 million jobs . . .

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STURGEON GENERAL'S WARNING: FISHY IC COMPLIANCE CLAIMS MAY BE HAZARDOUS TO YOUR BUSINESS

Independent Contractor (IC) compliance is hot, and there are a lot of purportedly "expert" solutions springing up to help solve these issues. Any time there is a market opportunity new businesses pop up, hoping to cash in on the trend. But this is a complicated field, and one of the reasons people look for experts is that the issues are confusing, which makes it difficult to tell who is for real and who is a . . .

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IC Risk: A Tidal Wave of Wage and Hour Class Action Lawsuits

If you think IRS reclassification is the only dimension of 1099 risk, think again. According to Garry Mathiason of the noted employment law firm Littler Mendelson*, there were 5,786 class action lawsuits for wage and hour violations filed in 2009, a 40% increase over the prior year and representing over 80% of all class actions. The cases include overtime, meal breaks and rest breaks, and minimum wage requirements. If you have misclassified workers as independent contractors instead of employees, then your risk exposure for wage and hour is undeniable . . .

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Employee Misclassification Prevention Act Hearings Today

There is movement in independent contractor legislation pending in Congress: the Senate Committee on Health, Education, Labor and Pensions conducted hearings today focused on the Employee Misclassification Prevention Act, or EMPA. The hearing was titled, "Leveling the Playing Field: Protecting Workers and Businesses Affected by Misclassification." That link hosts a video showing highlights of the hearing. If passed, the Employee Misclassification Prevention Act (EMPA) would amend the Fair Labor Standards Act to criminalize . . .

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New 1099 Law Pierces the Corporate Veil of Hidden Independent Contractors

The impacts of the new healthcare laws on contingent workforce management will not be fully understood for some time. But some provisions of great concern are approaching rapidly, including a little understood 1099 reporting provision slated to take effect on January 1, 2012. Like the proposed Employee Misclassification Prevention Act (EMPA) bill, this new requirement would “pierce the corporate veil” hiding independent contractor vendors and require immediate discovery and control over challenging spend categories such as statement of work consultants and sub-contractors.

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FedEx May Be In For Over $1 Billion

According to a press release issued yesterday by Leonard Carder, LLP, the first summary judgement on the multi-district class action lawsuit over the worker classification of FedEx Ground and Home Delivery drivers has been issued. The judge presiding over the 63 cases issued an Opinion and Order on May 28, 2010 granting summary judgement to the drivers in Illinois. The class action lawsuit, which has been developing over the past five years, centers on whether the delivery drivers are true independent contractors (as FedEx maintains) or are actually misclassified employees of FedEx.

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