First glimpse at how Wage and Hour is going to release guidelines

As of July 15, 2015 you are required to reevaluate your Independent Contractors.  SHRM has done an excellent job of defining the regulation changes using clear, everyday language.  This article states that the goal is for less independent contract work and more employee status with possible overtime rights.

The guidelines emphasize Qualitative rather then Quantitative evaluation of the person and the list that defines their status.  The best place to start when trying to define an independent contractor is  ” Is the person able to 1) make own schedule 2) use own tools”  This is the foundation definition of a contracted worker.  Next= Why are you contracting with them?  .Is it their expertise?  Is it because you do not employ anyone with this expertise?  Then according to the new guidelines, this may NOT be an independent contractor, but an employee.

There are six (6) guidelines that are to be used as one criteria.  These are based on how important the independent contractor is to your business.and how important you are to the substance of the independent contractor.  Unfortunately, the government has again initiated rules without clear guidelines and expects the employers to ‘figure it out’, because evidently they can’t.  A company will need to look at EACH individual situation/contractor rather than having a specific policy/procedure.  Even then- they may not be found to be right if there is an audit.

So what should a company do?  Document your reasons and be able to show that you made a ‘good faith’ effort to evaluate each and every situation.  You might as well get started, because you will need to initiate this process for your regular employees once the guidelines (?) are published for the new salary defined employees.

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