If it seems like we’ve been talking about employee classification compliance for years, well – we have. It’s an old story, but one that continues to dominate headlines nonetheless. The topic is a dense one, for sure. Regulations are ever-changing, and rules vary from jurisdiction to jurisdiction. And of course, some guilty parties simply never learn their lesson. Whatever the case may be, compliance remains a very real issue this year, further complicated by some pandemic-era wrinkles.
Here’s are three big things to know about the misclassification game in 2022:
- Compliance crackdowns are targeting the unprepared: At least in Washington, D.C., further enforcement action was launched earlier this year in a crackdown on independent contractor misclassification. Companies that had done little to nothing to comply with laws and regulations made for easy targets, while businesses that went above and beyond to adhere to federal, state, and local regulations, while meticulously documenting and implementing professional independent contractor relationships were far less likely to be impacted.
- Remote working scenarios will complicate matters: Work-from-home scenarios have become commonplace over the last two years, and many companies continue to enlist remote workers as a matter of convenience and cost-effectiveness. However, employee classification compliance remains critical regardless of whether your team is on-site or working across the nation or globe. Identifying bona fide employees as independent contractors can wreak havoc on your good standing. In remote settings, it is far too easy and tempting to circumvent compliance law. And again, the location of your remote workers must factor heavily in your decision-making. Employment law differs from state to state, a fact that should never be overlooked or taken lightly. Make sure you’re toeing the line and learning continuously about the rules governing remote employment.
- Negligence remains a costly, time-consuming, and tarnishing mistake: We’ve said it before, and we’ll say it again: Failing to identify your employees accurately can result in business-breaking and reputation-burning penalties. Oversight is a horrible way to go down, but it’s shocking how often it continues to occur. For that reason, business owners and managers must take time to learn and understand the difference between employees and independent contractors. (One of the biggest factors? Independent contractors determine their jobs’ specifics, including what tools are used and how projects are carried out. Employees, on the other hand, answer directly to you, and are privy to training and evaluations.)
Additionally, keep meticulous records. Leave no room for finger-pointing. Stay current with misclassification law and follow all rules and regulations to the letter.
Maslow Media Group regularly helps employers with employee classification compliance matters. As your Employer of Record, our team can help you to avoid costly fines – and worse – that could stem from a misclassification charge. Contact us today to learn more.