What's in a Name? Worker Classification Definitions in Flux: Publisher Clarifies Confusing Legislation

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PJC Publishing releases print and online guides to help attorneys and accountants properly classify and manage employee and independent contractor workforces.

Every state has a different test to determine a worker’s status and there are a number of bills in motion right now that may broaden or narrow the definition.

What do a satellite technician, an aspiring actress, and a cruise ship spa worker all have in common? Seemingly very little, but last month, all three found themselves involved in separate court cases with outcomes that hinged on whether they functioned as employees or independent contractors (Simmons v. Broadway Home Improvement Inc., 2014 U.S. Dist. LEXIS 102420 (S.D. Ind. July 28, 2014), Garcia v. Google, Inc., 2014 U.S. App. LEXIS 13709 (9th Cir. Cal. July 11, 2014), Shore v. Magical Cruise Co., 2014 U.S. Dist. LEXIS 101004 (M.D. Fla. July 24, 2014)).

The distinction is an important one for both workers and companies. The Bureau of Labor Statistics reported that approximately 8.424 million workers were self-employed in July 2014 (Bureau of Labor Statistics, "The Employment Situation--July 2014," http://www.bls.gov). Companies utilizing these workers experience the benefit of lower employment taxes, but give up control over how and when work is completed. Meanwhile, contractors enjoy flexible work arrangements, but take on the additional responsibilities and tax implications of being self-employed.

The highly-debated definition of “employee” is confusing and constantly being modified. “Every state has a different test to determine a worker’s status and there are a number of bills in motion right now that may broaden or narrow the definition,” says Andrea Miller, editor for PJC Publishing, LLC, (http://www.pjclegalpublishing.com) which publishes both federal and state guides that compile relevant statutes for easier reference, helping lawyers and accountants manage the complicated issue.

This unsettled regulatory environment makes it exceedingly difficult to stay informed on current developments surrounding worker classification issues. “It’s easy to see how even a well-meaning company could misclassify a worker,” Miller comments as she displays the 1400 pages of state unemployment tax code and related resources compiled in Hollrah’s State Guide on Independent Contractors (PJC Publishing LLC, 2014, http://www.pjclegalpublishing.com). Subscribers to this two-volume tome receive bi-monthly updates to reflect the newest changes in legislation and PJC has launched an online version of the guide in order to push updates to users even more quickly.

With scrutiny of worker classification on the rise and the legislative turmoil not likely to stop anytime soon, tools such as PJC’s guides are proving invaluable and necessary to attorneys and accountants. It is increasingly important for these professionals to be knowledgeable about the nuances of the relevant laws in order to properly manage company-worker relationships and comply with all wage and tax responsibilities. The stakes are rising for misclassification of workers and ignorance is not typically well-received by the Internal Revenue Service or the courts.

PJC Publishing, LLC is the nation’s leading source of books, guides, and education on legal issues related to independent contractors and the contingent workforce. For more resources on this topic visit http://www.pjclegalpublishing.com.

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Andrea Miller

Russell Hollrah
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