Caffarelli & Associates Ltd. founder Alejandro Caffarelli was quoted in a Chicago Tribune article detailing the United States Department of Labor’s Administrative Guidance regarding the classification of independent contractors. According to the Tribune, “[t]he guidance comes as a growing number of employers are contracting out services to third parties, including subcontractors, temporary agencies and franchisees. . . . Worker advocates say companies misclassify employees to save costs by not paying payroll taxes, unemployment insurance, workers’ compensation insurance and overtime.” The guidance comes on the heels of a California Labor Commissioner decision holding that Uber drivers have been misclassified as independent contractors.
The misclassification of employees as independent contractors continues to be a serious issue that not only affects workers, but also negatively impacts the U.S. economy. By misclassifying employees as independent contractors, employers avoid a plethora of laws protecting the rights of workers as well as payroll taxes, unemployment insurance taxes, etc., thus increasing the tax burden on honest companies and workers. To view the Tribune article, click here: Chicago Tribune — Independent Contractor Guidance Issued. To read the Guidance issued by the U.S. Department of Labor, click here: Administrator’s Interpretation on Misclassification.