“choose wisely”: independent contractor misclassification update tj eaves, higher education law...
TRANSCRIPT
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“Choose Wisely”:Independent Contractor Misclassification Update
TJ Eaves, Higher Education Law FellowCarrie Johnston, Staff Attorney
Joanna Carey Cleveland, Vice President for Legal Affairs and Deputy General CounselUNC General Administration
October 26, 2015
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Overview• (Raiders of) The Lost Ark
– A quick overview of the independent contractor framework– What does it mean to be an independent contractor v. employee?
• The Temple of Doom– Growing alliances among the federal DOL, IRS, and States to
discover and remedy “misclassifications”
• The Last Crusade– Review of university policies and practices– Understand your independent contractor processes– Role of legal counsel
• Questions/Discussion
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The Lost Ark
• Background on independent contractor rules• Independent contractor v. employee– Responsibility for tax payments– Responsibility for workplace injuries– Other key differences
• Traditional IRS test– Common law rules: behavioral, financial, type of
relationship
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The Temple of Doom
• Growing alliances among the federal DOL, IRS, and States– DOL currently partnered with 26 states (NC not one… yet)– Increased funding for enforcement activities– Federal IRS audits and DOL investigations
• Employer liability
• NC bill introduced this past session (S694 – “Employee Fair Classification Act”)
• Examples of recent voluntary classification settlements or other outcomes
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The Last Crusade• Review your university policies and procedures
– Time to update your IC policy?– Good campus examples
• Understand your independent contractor processes– How are independent contractors added? – Which offices are involved in reviewing/approving?– Addressing common issues:
• Rehired TSERS retirees• Your employees in two different roles on your campus• Other UNC or State employees engaged on your campus
• Role of Legal Counsel– Helping assure there is a defensible process in place– Resource for Procurement, HR, Internal Audit as needed– Educating clients on ongoing federal/State enforcement efforts
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Questions/Discussion
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Links• Department of Labor
– Misclassification of Employees as Independent Contractors http://www.dol.gov/whd/workers/misclassification/
– Fact Sheet 13: Am I an Employee? http://www.dol.gov/whd/regs/compliance/whdfs13.htm
– Administrator’s Interpretation No. 2015-1 (July 15, 2015) http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm
• IRS– Government Workers: Employees or Independent Contractors http
://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Government-Workers:-Employees-or-Independent-Contractors%3F
– Independent Contractor (Self-Employed) or Employee? https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee