Walters, who is a consultant with the FiveL Company in Westminster, MD, offered her tips at SHRM’s Employment Law and Legislative Conference, held recently in Washington, DC.
As one indicator of what’s in store for employers, says Walters, note that the Congressional budget includes $14 million to combat misclassification, including $10 million for grants to states to identify misclassification and recover unpaid taxes and $4 million for personnel at the DOL Wage and Hour Division to investigate misclassification.
Another factor that means more scrutiny is memoranda of understanding (MOUs) between DOL, IRS, and some states that the various agencies will share information, says Walters.
A lot of entities—from DOL and IRS to state agencies for taxes, workers’ compensation, and unemployment—believe they are losing money to misclassification, and they want to get it back. For example:
There are also concerns around:
Walters focused first on two areas where she sees many mistakes in classification, unpaid summer interns and “volunteers.”
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Summer’s coming, Walters says, so be sure you are properly treating your unpaid interns. DOL regulations require that:
Under the FLSA, employees may not volunteer services to for-profit private sector employers.
However, for religious, charitable, or similar non-profit organization, the rule is different. Individuals who volunteer or donate their services, usually on a part-time basis, for public service, religious or humanitarian objectives, not as employees and without contemplation of pay, are not considered employees of the religious, charitable or similar non-profit organizations that receive their service
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It depends! says Walters. There are at least three different guides: EEOC, IRS, and the Supreme Court.
According to the EEOC, the indicators that a worker is an employee—not an independent contractor—are:
In tomorrow’s Advisor, IRS and Supreme Court guidelines, plus an introduction to the “50x50,” a unique guide to fifty employment laws in fifty states.
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