By the time you are reading this the nation will have selected a new President. Whether you voted for Obama or not, one lasting legacy he will certainly have upon the small business landscape is the pending legislation known as the Obama-Durbin Independent Classification Act or ICPCA.
The ICPCA is expected to pass into law by the overwhelmingly Democratic congress early next year in response to a growing trend toward “cracking down’ on business owners using Independent Contractors rather than full-time workers. While the bill does not limit the use of IC’s, it does poise severe penalties against business owners that misclassify a worker as an Independent Contractor rather than employee. It also tightens the definition of IC and makes it easier for workers to report business owners and file official complaints against corporations for back wages, benefits and other compensation.
Not only does the bill make it easier for workers to sue employees for back wages and other compensation but hefty fines at the state and federal level are also expected. To support the ability to investigate potential violations, the IRS has made worker classification enforcement a top priority. Additionally, states are now required to prove how effective their own investigation programs are and enhanced communication between the IRS, Department of Labor and Workers Compensation makes it easier than ever to file multiple complaints should a company come under investigation.
Since the government itself admits “there is neither a single or simple test used to determine whether a worker is an independent contractor or employee†it should come as no surprise that small business owner and contractors alike are left confused by the new changes. With hefty penalties and major incentives for workers and government agencies to find the employer at fault, small business owners are increasingly seeking ways to reduce the risk of inadvertent misclassification. One easy and effective method is to use a third party outsourcing company to handle it all for you! Fast, affordable and as risk-free as possible, it is one less worry during these challenging economic times.
Find out how easy it can be to reduce your expenses and eliminate risk by speaking to a friendly PCG representative today. Chances are you small business solutions are right around the corner just waiting for you to fill out a simple form and get back to the business of growing your share of the market.
