MyWorkChoice’s Post

1099 hourly workers have no place in manufacturing and supply chain. Period. You may have noticed I have strong opinions on this. Here's why. -1099 workers do not meet IRS standards as independent contractors. They don’t bring their own tools, they’re not self-directed, they don’t plan their own schedules, and they’re not unsupervised. They’re supervised, directed, and trained under your company’s roof. So why do so many staffing companies - mostly marketplaces - use them? Because it's cheaper. Companies act like it's a 1099 contractor because they can choose their schedule. No, they can't. These workers are taking jobs that require them to be there at a specific time, usually for 8-10 hours a day, five days a week, and they're told when to show up and when to leave. They're trained on how to do a specific task by your Trainers and Supervisors. And they're given the tools and PPE they need to do the same job in your facility standing right next to W-2 employees. They're classified this way because it's cheaper, not because it’s accurate or fair. -When someone is hired to do the same job as your own hourly workers, under your supervision, using your company’s tools, they are not independent contractors. Think about it, would you handle your temporary production workers the same way you handle a licensed plumber or electrician that comes into your facility? Nope. Misclassifying these workers will catch up with companies, leading to serious legal and financial consequences. Don't believe me? What happens when a 1099 worker on the line has a serious injury and their "accidental insurance" doesn't cover the bills. What happens when the Feds decide these workers have been misclassified and the government is owed payroll taxes. I'm a firm believer in the importance of W-2 workers. It's about time companies stop cutting corners and start doing right by their employees. By classifying workers correctly, you build a reliable workforce that's protected and covered - for them AND for you. Stop the misclassification. Protect the company. Respect the workers. If you want to talk about this in more detail, feel free to reach out. I'm happy to share the nightmare situations I've seen happen and help you avoid those same problems.

  AG Henry Leads Coalition of 14 States in Urging U.S. Department of Labor to Require Contractors to Report More Payroll Information About Workers Letter Calls for Mandated Reporting that Would Ensure Fair Treatment of Laborers FOR IMMEDIATE RELEASE — Wednesday, April 3, 2024   HARRISBURG — Pennsylvania Attorney General Michelle Henry announces, along with 13 other state Attorneys General, a letter to the U.S. Department of Labor calling for more detail on payroll forms submitted by contractors regarding workers on public projects.   The existing forms do not require comprehensive information to be provided regarding pay, deductions, and benefits — which makes it easier for employers to break fair labor laws without detection.   More detailed forms would enable state enforcers and investigative agencies to better identify violations of the Davis-Bacon and Related Acts, which are in place to protect workers from unfair labor practices like wage theft and fraud.   "Requiring employers to report more about their workers and their compensation will help Pennsylvania laborers and their families by ensuring they get the pay and benefits they deserve,” Attorney General Henry said. “I commend the partner states who stand with me in this endeavor to make it harder for deceitful employers to skirt the law and line their pockets by taking from workers.”   Attorney General Henry led the effort — joined by Attorneys General of Colorado, Connecticut, Washington D.C., Delaware, Hawaii, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, Nevada, New York, and Rhode Island.   The letter, which was sent March 29, states that misusers of the current reporting system concoct “complex schemes” to misappropriate fringe benefit funds or take unlawful deductions to reduce workers’ pay.   In one Pennsylvania case, an employer forced electricians and plumbers to record a portion of their hours as laborers (according to predetermined ratios). The contractor stole $64,000 through the scheme.   These schemes often cause substantial losses to workers and are difficult to detect under the current reporting system. The states, in their letter, ask the Department of Labor to require:   Disclosure of hourly rate equivalents claimed for each type of benefit the employer provides. Employers should be required to provide an hourly rate equivalent for each benefit claimed. Information about the benefit plans provided. Employers should be required to disclose whether benefits provided are self-funded or unfunded plans. Itemization of deductions. Mandating employers to itemize deductions from workers’ pay.  

**What do you think about the U.S. Department of Labor's new rule regarding independent contractors? *** The U.S. Department of Labor issued a final rule that will force companies to treat some workers as employees rather than independent contractors, leading to continued clashes between the business community and workers' rights groups, with anticipated litigation to follow. The rule is expected to impact industries that rely on contract labor or freelancers, such as trucking, manufacturing, healthcare, and app-based gig services like driving, delivery, or production assistants. I have gone back-and-forth on the merits of each side's position in this long-term controversy. I see the value and the policy arguments for protecting workers who may be intentionally misclassified by companies so that they don't have minimum wage, over-time, or health insurance, or other legal protections. On the other hand, I have many small business clients who rely on gig-workers -- folks who have a couple of side hustles and a startup -- to help them to get their work done (and the gig workers that they hire truly enjoy the freedom to create their own schedules around their other entrepreneurial pursuits; the consultant arrangement helps them to fund their dreams). Many of these smaller business clients could not afford the extra expenses associated with hiring full-time or part-time employees, hence, they are against the new DOL Rule (larger companies, like Uber or Lyft, may have a harder time making this exact argument). Something in this article struck me -- it was the first time that I saw an argument advanced by *the business / company side*, arguing that the new US DOL Rule will *promote* business' competitive advantage (usually, the companies argue that expanding employee classification rules will harm their business' ability to make money). The article notes what I have seen with some of my clients: they run a company and they want to follow the laws and correctly classify their workers as employees, but all of their competitors are improperly classifying workers as consultants, and so my client -- the company who wants to avoid penalties, fines, or lawsuits (or wants to do the right thing, or both) -- cannot compete with their counterparts who are bucking the system, calling year-round day laborers independent contractors, and charging less money to their clients. Of course, I advise them to follow the laws, but I do sympathize with their dilemma. What do people think about the new rules governing employee classification? Is the US Department of Labor out of touch with a changing, gig-worker economy? Or are more protections needed to keep big business in check? Or is your answer yes to *both* of these questions? Some thoughts to ponder on this WednesdayWisdom day! https://lnkd.in/ezaC_gYU

Biden Administration To Unveil Contractor Rule Set To Upend Gig Economy: An anonymous reader quotes a report from Reuters: The administration of U.S. President Joe Biden will release a final rule as soon as this week that will make it more difficult for companies to treat workers as independent contractors rather than employees that typically cost a company more, an administration official said. The U.S. Department of Labor rule, which was first proposed in 2022 and is likely to face legal challenges, will require that workers be considered employees entitled to more benefits and legal protections than contractors when they are "economically dependent" on a company. A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber, Lyft and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022. The rule is among regulations with the most far-reaching impacts issued by the Labor Department office that enforces U.S. wage laws, according to Marc Freedman, vice president at the U.S. Chamber of Commerce, the largest U.S. business lobby. But he said the draft version of the rule provides little guidance to companies on where to draw the line between employees and contractors. "Economic dependence is an elusive concept that in some cases may end up being defined by the eyes of the beholder," Freedman said. The Labor Department in the proposed rule said it would consider factors such as a worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer's business." The rule replaces a Trump administration regulation that said workers who own their own businesses or have the ability to work for competing companies, such as a driver who works for Uber and Lyft, can be treated as contractors. [...] The Biden administration has said the Trump-era rule violated U.S. wage laws and was out of step with decades of federal court decisions, and worker advocates have said a more strict standard was necessary to combat the rampant misclassification of workers in some industries. Read more of this story at Slashdot.

Biden Administration To Unveil Contractor Rule Set To Upend Gig Economy: An anonymous reader quotes a report from Reuters: The administration of U.S. President Joe Biden will release a final rule as soon as this week that will make it more difficult for companies to treat workers as independent contractors rather than employees that typically cost a company more, an administration official said. The U.S. Department of Labor rule, which was first proposed in 2022 and is likely to face legal challenges, will require that workers be considered employees entitled to more benefits and legal protections than contractors when they are "economically dependent" on a company. A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber, Lyft and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022. The rule is among regulations with the most far-reaching impacts issued by the Labor Department office that enforces U.S. wage laws, according to Marc Freedman, vice president at the U.S. Chamber of Commerce, the largest U.S. business lobby. But he said the draft version of the rule provides little guidance to companies on where to draw the line between employees and contractors. "Economic dependence is an elusive concept that in some cases may end up being defined by the eyes of the beholder," Freedman said. The Labor Department in the proposed rule said it would consider factors such as a worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer's business." The rule replaces a Trump administration regulation that said workers who own their own businesses or have the ability to work for competing companies, such as a driver who works for Uber and Lyft, can be treated as contractors. [...] The Biden administration has said the Trump-era rule violated U.S. wage laws and was out of step with decades of federal court decisions, and worker advocates have said a more strict standard was necessary to combat the rampant misclassification of workers in some industries. Read more of this story at Slashdot.

Biden Administration To Unveil Contractor Rule Set To Upend Gig Economy: An anonymous reader quotes a report from Reuters: The administration of U.S. President Joe Biden will release a final rule as soon as this week that will make it more difficult for companies to treat workers as independent contractors rather than employees that typically cost a company more, an administration official said. The U.S. Department of Labor rule, which was first proposed in 2022 and is likely to face legal challenges, will require that workers be considered employees entitled to more benefits and legal protections than contractors when they are "economically dependent" on a company. A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber, Lyft and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022. The rule is among regulations with the most far-reaching impacts issued by the Labor Department office that enforces U.S. wage laws, according to Marc Freedman, vice president at the U.S. Chamber of Commerce, the largest U.S. business lobby. But he said the draft version of the rule provides little guidance to companies on where to draw the line between employees and contractors. "Economic dependence is an elusive concept that in some cases may end up being defined by the eyes of the beholder," Freedman said. The Labor Department in the proposed rule said it would consider factors such as a worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer's business." The rule replaces a Trump administration regulation that said workers who own their own businesses or have the ability to work for competing companies, such as a driver who works for Uber and Lyft, can be treated as contractors. [...] The Biden administration has said the Trump-era rule violated U.S. wage laws and was out of step with decades of federal court decisions, and worker advocates have said a more strict standard was necessary to combat the rampant misclassification of workers in some industries. Read more of this story at Slashdot.

"But how do HMRC know what hours employees are doing where we don't keep records?" This question comes up a lot when talking to employers - both at my time with HMRC and EY. While employers *should* be keeping time and attendance records for all staff - including salaried - it's not always the case. So - how does HMRC calculate potential underpayments or establish NMW risks when they don't know which actual hours have been worked? Part of the answer to that lies in a new update to the HMRC Fact Sheet 1 - sent to employers at the start of an HMRC NMW investigation. "The information we may ask you for might include communications data. Communications data is the who, where, when, and how of a communication but not its content, for example, what was said or written. Communications data relates to the use of a telecommunications service and is held by a Telecommunications Operator." Where HMRC don't have robust time and attendance data - they can put the puzzle of 'working time' together through interrogating all kinds of data and information available to them - including e-mails, text messages, CCTV and through witness interviews with both workers and ex-workers. HMRC can review laptop data, mobile phones and internal business systems and software to find out when and where people were 'working' for NMW purposes. Remember - as part of an investigation, the burden of proof lies on the employer to prove that they *are* paying at least NMW to all workers, for all hours. That's why it's so important to put in place robust and reliable processes which you can rely on in the event of an enforcement check. New rules around the reporting of working time and benefits as part of payroll compliance and RTI responsibilities all make up this bigger picture around workforce governance, compliance and recording. At EY - our NMW team work closely with our legal, payroll and rewards/benefits colleagues to advise and support employers in getting things right. Get in touch if you would like to discuss further! Jeni Morris - NMW Specialist Sue Robinson Vaneeta Khurana Elliott Mason Ian Thomas David Spencer

This article is a great read about far-reaching impacts of the pending DOL rule concerning the new criteria for worker classifications as Independent Contractors. I’ve previously posted about the potentially budget busting impacts based solely on the FLSA requirements for overtime if workers are required to be re-classified as employees. The article piles on by explaining extended legal impacts – impacts such as those related to health, leave and other employment benefits requirements for employees under federal statutes such as the FMLA and as required by states and some local laws too. In addition to increased payroll costs for directly impacted workers, there are operational impacts to consider which could further impact an employer's bottom line. For example, systems and technology tools will have to be updated to reflect changes in worker status. I speak on the consideration of operational impacts based on my past experience.     Case in point – In the early days of the digital transformation of time & attendance systems, I managed a team of employment law consultants to conduct payroll rules analyses as a mitigating action before data migration (further complicated by legacy manual timekeeping systems in those days). Part of the analyses was to determine FLSA job classifications. When workers were re-classified as overtime-eligible, there were both downstream and upstream system impacts. Because we were working against a go-live timeline, that meant money was on the line with more hours worked in a shorter timeframe. We also analyzed other employment-related mandates which influenced additional changes required to an employee profile, particularly for accurate pay practices. Every change to the employee profile triggered a data quality risk and extended the data validation process; the immediacy required in operationalizing pay-related compliance data compounds the cost impacts because dual maintenance is usually necessary in the legacy system and the modernized technology. In my experience with pay compliance, I’ve managed mitigation strategies for a variety of risks and corresponding cost impacts.   At TULIP, we assess employment-related compliance with a 360-degree lens to identify risks holistically across the entire business operating model including strategy, structure, processes, people, and technology. To learn more about TULIP’s HR Compliance and Training offering, email us at info@tulipadvisory.com and reference “Compliance” in the subject line. We look forward to hearing from you!     Check out the article for additional context on the far-reaching legal impacts, in particular, of the pending U.S. DOL’s FLSA worker classification change. #FLSA #EmploymentLaw #PayrollCompliance #Data #DataAnalytics #Overtime #WorkerClassification #EmployeeBenefits #CostAvoidance #BottomLine   https://lnkd.in/e7YTUunH