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1099 Risk Blog
State Enforcement
February, 3 2010
Monday's release of Obama's 2011 Budget has generated a flurry of excitement regarding an increase of $25 million for the Department of Labor (DOL) to go after worker misclassification in a joint effort with the Treasury. The efforts are expected to increase Treasury receipts by more than $7 billion over a ten year span. But the $25 million line item in the budget doesn't tell the whole story of what's intended for the future of worker classification enforcement in Obama's 2011 budget. Hey . . . what's this $8 billion for the IRS to target critical areas of non-compliance? And why isn't anyone excited about that?? Read on . . .
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January, 14 2010
Oklahoma state Senator Andrew Rice (D-Oklahoma City) has filed Senate Bill 1384 to stop employers from improperly misclassifying workers as independent contractors. The practice of worker misclassification is often an attempt on behalf of businesses to avoid payroll taxes and other costs such as benefits and/or worker's compensation insurance. If the bill passes, Oklahoma will join a host of other states already cracking down on the practice of improperly classifying workers as independent contractors . . .
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November, 17 2009
New Hampshire has jumped into the forefront of my contingent workforce news world by launching a tip-off website for the reporting of suspected misclassification of workers as independent contractors. The inter-agency Task Force for the Misclassification of NH Workers website now has a quick and easy form launched just last week where workers, citizens, agencies, and businesses can report suspected improper classification of employees and independent contractors.
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June, 23 2009
Our zombie news item for today is the grotesque revival of a proposed California budget fix that includes a 3% tax withholding for independent contractors. For those of you who don’t know what I am talking about, read on: this might be fun; I’m going to make yet another bold prognostication (see my last one on E-Verify). Withholding taxes on independent contractors? If you are feeling some déjà vu, it’s not just you. This zombie of a proposal has been raised and killed so many times . . .
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January, 14 2009
According to the Des Moines Register and other sources, Governor Culver is endorsing a recent report by Iowa's Task Force on independent contractor misclassification, and taking action on the matter. The state will be hiring 9 full time employees and spending $771,000 a year to crack down on the willful practice of misclassifying employees as independent contractors. Iowa joins many other states in addressing the issue.
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July, 9 2008
Today's news feed reveals that the state of Rhode Island is getting serious about recouping its tax gap -- that difference between the taxes collected and the taxes owed. New technology and the innovation available through a public-private partnership are enabling Rhode Island to feed IRS federal tax data into a data warehouse along with state tax return records, and then mine that data to look for discrepancies.
RI expects to recover around $10 million in uncollected taxes, targeted at independent consultants, contractors, and small businesses.
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July, 3 2008
Michigan and Maryland are joining other states in bringing increased scrutiny at the local level toward the classification of workers as either contractors or employees. The employee misclassification debate is now heating up across the country, with most agencies now labeling misclassification as a pervasive form of tax evasion.
2008 is the year for businesses to come to terms with the fact that agencies at every level -- local, state, and federal -- are looking to recoup lost payroll tax revenue. They are awake, they are sharing information, and they are considering it well worth their effort to go after it.
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June, 12 2008
A Pennsylvania bill that would make the misclassification of employees as 1099 independent contractors a felony is making progress after passing in the House on Monday.
"Misclassifying employees as independent contractors is a tax-evasion strategy," the bill's sponsor, Delaware County Democrat Rep. Bryan R. Lentz said. "Until we impose harsh penalties on the practice, workers and law-abiding employers will continue to get cheated. When we allow some unscrupulous employers to avoid responsibility to their workers, we allow them to gain a competitive advantage over the vast majority of employers who do play by the rules and who do treat their employees fairly."
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April, 17 2008
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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Tags:
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New Hampshire,
state,
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1099,
classification,
reclassification,
misclassification,
contractors,
employees,
worker's compensation
April, 2 2008
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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Recent NewsMBO Partners Appoints Jay Lash VP of Market Strategies
March 1, 2010 -- MBO Partners appointed Jay Lash as VP of Market Strategies. Lash, formerly with Allegis Group Services, brings over 25 years of experience in contingent workforce management, VMS, MSP, and human capital solutions, and will be focused on building strategic partnerships to make it easier for independent contractors and companies to work together in a business climate of increasingly stringent compliance.
Read the press release >
Visit the newsroom > New ResearchContingent Labor Strategies for 2010 and Beyond
This research from Aberdeen benchmarks performance of 200 companies with respect to contingent workforce management. The study found the risks of contingent labor, particularly independent contractors, must be mitigated, while delivering performance across areas like time, cost, and compliance with labor policies and employment law.
See all white papers > Download White PaperE-Verify Requirements for Contractors
Jointly produced by Michael Best & Friedrich LLP and MBO Partners, this paper offers a groundbreaking overview of the legal ramifications and risks for federal contractors required to use E-Verify, with particular attention to how the new regulations apply to independent consultants, independent contractors, small vendors, and other sub-contractors. Get the paper here!
See all white papers > Talk With Our ExpertsCall 1-800-220-0469, or complete this form. Our experts will be in touch promptly.
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