With President-elect Donald Trump preparing to take office in 2017, everyone is wondering, “How will this affect me?” Businesses that use Independent Contractors (ICs) are particularly interested in how this change in administration will affect them. While exact details remain to be seen, there will likely be a change in the federal government’s approach to handling IC misclassification.
IC Misclassification Under President Obama
The eight-year Obama Administration worked closely with the U.S. DOL and the IRS to enforce IC misclassification laws. Much of their approach in tackling this issue was to target companies who had little or no defense against IC misclassification claims. Congress did not pass any bills addressing the issue, which left more challenging IC misclassification cases to the hands of private class action lawyers. Such was the situation with prominent lawsuits against Uber, FedEx, Amazon, and others.
Another focus of the Obama Administration was improving joint/coordinated legal enforcement with the states. The Misclassification Initiative of 2011 lead to 35 state labor departments cooperating with the U.S. DOL. Interestingly, approximately half of those states currently have Republican governors, indicating that most states view this as a non-partisan issue.
IC Misclassification Under President Trump
With President Trump at the helm, the federal government’s approach to handling issues such as IC misclassification may shift. Many believe that the Trump Administration will take more of a “laissez-faire” approach and pull some of the government’s control out of the economy. Still, even if this holds true, there is no reason to believe that companies will be able to continue to misclassify employees as independent contractors without facing any consequences.
Recognizing that many states have passed bipartisan legislation against IC misclassification, it is safe to assume that the states will continue working to combat this issue. While the U.S. DOL under Republican administration will likely pull back its efforts to enforce these laws, states may respond by redoubling their efforts to enforce IC laws and protect workers against misclassification.
How to Respond?
Companies that use ICs should acknowledge that even with major changes in the federal government, state legislatures are likely to continue working to contend IC misclassification. Private class action lawyers will also continue targeting companies who misuse their workers and fail to implement and document legally compliant IC business relationships. Consequently, the best approach for companies using ICs is to always strive for optimal IC compliance.
Consultech works together with businesses to ensure that IC relationships are well-documented, structured, and implemented in full respect of the law. With over 30 years of experience helping businesses in a variety of industries, our legal team can minimize your risk of claims, audits, and regulatory assessments. We are also prepared to legally represent you in the event of any IC misclassification claim. For proactive and reactive services to help your business become compliant with current IC laws, contact us using the information below:
Call: (800) 769-2994
Email: [email protected]