Real-life Lessons From Company's Wage and Hour Missteps

The Department of Labor (DOL) recently recovered more than $219,000 in back wages and liquidated damages on behalf of 44 workers who were misclassified as independent contractors, providing a real-life example of how serious the government's crackdown on misclassification is.

The employer had moved a large number of existing employees to a staffing agency's payroll.  Those workers were paid as independent contractors, receiving pay at a set "straight time" rate for all hours worked, even overtime, and did not have taxes withheld from their paychecks.

Here are some important take-aways from this case you may want to share with your clients.

  1. Companies must follow the DOL's guidelines for straight time and overtime.
  2. Misclassifying W-2 employeees as independent contractors is serious business that can cost serious money.  
  3. Even if companies outsource the employment of their workers, they are responsible for ensuring they are properly classified by the staffing agency.

Debbie Fledderjohann is the President of Top Echelon Contracting, Inc.

Views: 9

Tags: 1099, Employees, W-2, contractors, independent

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