Construction Citizen has been following this issue for the last few months and most of our efforts have been to track the progress of the laws being introduced in the various states to make misclassification a criminal offense. We have also mentioned that Congress has the opportunity to pass federal legislation under the Employee Misclassification Prevention Act introduced as HR 5107 in the House and S 3254 in the Senate.
For those of you who are using the 1099 independent contractor approach for your contingent workforce, we have found some guidelines that might help you in your efforts especially in this economy. Secure Talent, a San Francisco based 1099 compliance firm, has a white paper entitled 8 Tips for Proper Worker Classification that you will find informative. Several of those tips might have helped Whiting –Turner avoid the problems that we showed you in the latest video. Those tips for success are:
- Understand the Government guidelines.
- Use independent contractors that have an established business.
- Use independent contractors that provide services not integral to your core business.
- Create and execute appropriate contracts with each independent contractor for each engagement.
- Address worker classification for each and every project.
- Maintain audit files to support classification decisions.
- Do not engage a former W-2 employee of your company on a 1099 basis.
- When in doubt, outsource!
You can read more about these tips on the Secure Talent website.