Business:Management
Wendy Sellers speaks urgently about the shifting laws regarding independent contractors. This change is set to take full effect in March 2024, replacing the existing rules established in 2021. This mandate prompts employers to pay close attention to their current contractors on their "payroll" or "books". Violating these new laws, either deliberate or accidental, could lead to serious penalties such as fines, imprisonment, or wage-related obligations of exceptional amounts.
Moving forward, these new rules will apply the economic reality test using six factors to distinguish whether someone is an independent contractor or a W-2 employee.
The factors to consider include the role of the individual service to the business, the contractor's investment in facilities and equipment, the nature and degree of control by the employer or contractor, opportunities for profit and loss, initiative with judgement or foresight for success, and lastly, the persistence of the relationship.
A violation identified as willful or intentional may extend the two-year statute of limitations for making amendments to three years.
Check with employment attorneys or HR consultants to help them navigate this complex and evolving landscape.
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