New Legislation Aims to Tighten Employee Misclassification

New federal legislation aimed at getting tough on independent contractor misclassification was introduced September 15 in Congress.

The Fair Playing Field Act of 2010 was introduced by Sen. John Kerry, D-Massachusetts, and Rep. Jim McDermott, D-Washington.

It aims to:
• End the moratorium on Internal Revenue Service guidance addressing worker classification.
• Requires the secretary of the Treasury to issue prospective guidance clarifying the employment status of workers for federal employment tax purposes.
• Requires those who use independent contractors to provide them with a written statement on their federal tax obligations, the labor and employment law protections that do not apply to them and their right to seek a determination from the IRS on their status.
• Raises penalties for misclassification.

“The legislation is timely, as misclassification is an increasing problem, one that puts employers who properly classify their workers at a disadvantage in the marketplace and costs the government billions of dollars in unpaid taxes,” Vice President Joe Biden said in a written statement.

A similar piece of legislation, the Employee Misclassification Prevention Act, was introduced in June.

Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.

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