Independent Contractors

Transitioning Former Employees Into Contingent Workers
Excerpt:"To realize all potential benefits of this transition, employers must ensure that they continue to comply with applicable employment, labor, and tax laws, and that they properly classify their workforce. This article outlines the issues that employers should consider when transitioning to a contingent workforce[.]"(Staffing Industry Analysts)

[Guidance Overview] Interim Rule Implements Reporting Requirements on Covered Federal Contractors
Excerpt:"[T]he federal government issued an Interim Rule on July 8, 2010, that requires many federal contractors and subcontractors to report and make publicly available the total compensation of their top five executives."(Constangy, Brooks&Smith, LLP)

Temporary Federal Employment Raises Concern Among Lawmakers and Unions
Excerpt:"In a hearing before the House Oversight and Government Reform Federal Workforce Subcommittee, witnesses told lawmakers that temporary employees are important to agencies'missions, but they also are difficult to retain because they don't receive the same benefits as permanent workers."(GovernmentExecutive.com)

Washington-Baltimore Area Benefits Survey: Part-Timers Getting More Perks
Excerpt:"Employers in the Washington-Baltimore region offered part-time workers better perks this year, such as paid days off, in lieu of creating full-time positions, according to an annual survey of human resources officials to be released [today]."(The Washington Post; free registration required)

Employers Hiring Fewer Full-Time Workers, More Contractors
Excerpt:"Many of the jobs employers are adding are temporary or contract positions, rather than traditional full-time jobs with benefits. With unemployment remaining near 10%, employers have their pick of workers willing to accept less secure positions."(CNNMoney.com)

OMB Considering Narrowing Federal Contractor Reimbursements for Pension Costs
Excerpt:"The Obama Administration is considering disallowing certain defined benefit pension plan costs under federal contracts, targeting investment decisions and other actions that may have resulted in higher costs."(HR Policy Association)

Clamping Down on Misclassification of Workers
Excerpt:"A proposed federal law -- that experts expect to pass -- will require employers to notify employees and others who do work for them of their employee-classification status. Noncompliance with the law would bring high penalties, while compliance might prompt workers to consider legal action on wage-and-hour issues."(Human Resource Executive Online)

Responsible Federal Contracting: Report from the Middle Class Task Force
Excerpt:"In its first annual report, the Middle Class Task Force says it will push for stronger standards from federal contractors to make sure they offer proper wages and benefits, and comply with labor laws. Just how that will shake out remains to be seen, but HR executives at companies that depend on federal contracts had better start paying attention."(Human Resource Executive Online)

DOL Intends to Increase Investigation and Prosecution of Businesses That Misclassify Employees as Independent Contractors
Excerpt:"In the February 1, 2010 budget proposal for the 2011 fiscal year, President Obama has recommended awarding the U.S. Department of Labor (DOL) $25 million for the specific purpose of investigating and prosecuting employers who misclassify employees as independent contractors."(McKenna Long&Aldridge LLP)

Obama Budget Proposes Major Worker Classification Reforms
Excerpt:"The Administration's proposals would send a strong signal that it supports potential groundbreaking changes -- which are likely to have ripple effects on employee benefit programs, wage and hour laws and many other areas."(Groom Law Group)

DOL Cracking Down on Employee Misclassification
Excerpt:"As part of its stepped-up enforcement of workplace laws, the Obama administration plans to crack down on companies that treat workers as independent contractors when their job duties are similar to those of an employee. In its proposed budget for fiscal 2011, the Department of Labor is allocating $25 million for a joint initiative with the Department of the Treasury to hire 100 investigators to target employers who misclassify their workforce."(Workforce Management; free registration required)

DOL Cracking Down on Employee Misclassification
Excerpt:"As part of its stepped-up enforcement of workplace laws, the Obama administration plans to crack down on companies that treat workers as independent contractors when their job duties are similar to those of an employee. In its proposed budget for fiscal 2011, the Department of Labor is allocating $25 million for a joint initiative with the Department of the Treasury to hire 100 investigators to target employers who misclassify their workforce."(Workforce Management; free registration required)

The IRS Employment Tax National Research Project
Excerpt:"This month, the IRS with little official fanfare and no real advance warning, will begin a'national research project'to study (1) payroll taxes, (2) fringe benefits, (3) independent contractor, (4) expense reimbursements and (5) other related'payroll'issues."(Thompson Publishing Group Inc.)

Benefits Becoming Crucial in Recruiting Contingent Staffers
Excerpt:"In this tough economic climate, many are coming to staffing agencies having lost their regular full-time jobs and their health insurance. If they happen to be single or can't get on their spouse's insurance, they want to work for a staffing firm that not only provides medical coverage but also makes it affordable -- or at least more affordable than expensive COBRA premiums."(Workforce Management; free registration required)

The Disposable Worker
Excerpt:"You know American workers are in bad shape when a low-paying, no-benefits job is considered a sweet deal. Their situation isn't likely to improve soon; some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That's because this recession's unusual ferocity has accelerated trends -- including offshoring, automation, the decline of labor unions'influence, new management techniques, and regulatory changes -- that already had been eroding workers'economic standing."(BusinessWeek via Yahoo! Inc.)

Benefits Becoming Crucial in Recruiting Contingent Staffers
Excerpt:"Many staffing firms are offering health insurance as well as an array of benefits because these are great ways to attract and retain workers."(Workforce Management; free registration required)

Contractor Isn't Eligible'Employee'Under Pension Plan, Appeals Court Says
Excerpt:"A pension plan administrator acted reasonably in denying coverage to a contract worker who was not on the company's payroll, the 10th US Circuit Court of Appeals has ruled (Scruggs v. ExxonMobil Pension Plan). Key factors in the decision included the method by which the worker was paid, the wording of plan provisions, and the plan's reliance on payroll data for benefits administration and communications. Though the 10th Circuit sided with the plan sponsor, employers may wish to consider steps to minimize litigation exposure for similar claims."(Mercer LLC)

[Guidance Overview] Modified Work Arrangements for Employees Under Code Section 409A
Excerpt:"This article examines the application of Section 409A to modified work arrangements -- on-call or reduced time work arrangements, consulting arrangements, leaves of absence, rehire situations and other employment-related changes. Internal Revenue Code Section 409A allows a'separation from service'to be a payment trigger for deferred compensation, including separation pay, supplemental retirement benefits, account-balance deferred compensation and other payments. [Originally published March 23, 2009.]"(Faegre&Benson)

The Emerging New Workforce: Employment and Labor Law Solutions for Contract Workers, Temporaries, and Flex-Workers (PDF)
51 pages. Excerpt:"The purpose of this Report is to provide employers with the tools to prepare now for the employment and labor law challenges they will likely face when the post-recession workforce emerges. Littler predicts that'contingent workers'will constitute, on average, a full 50% of the new source of workers to whom employers will turn as the recession ends. The result of this trend will be that contingent workers will make up approximately 25% of the total workforce, and this percentage will continue to increase."(Littler Mendelson P.C.)

Contingent Workers and Employee Benefits, Chapter in 3rd Edition of ERISA Litigation (PDF)
Excerpt:"The author reviews case law developments and offers recommendations on how companies and contingent workers might best deal with the issues involved. This is an update of an earlier version of this chapter for the third edition of ERISA Litigation, published by The Bureau of National Affairs in 2008, incorporating all legal developments that occurred through the end of 2007."(The Bureau of National Affairs, Inc. via Janich Law Group)

Google Cuts Temporary Workers; Also Curbs Fringe Benefits
Excerpt:"Google Inc. has jettisoned a substantial number of temporary workers in a recent austerity drive spurred by the recession . . . . To help shore up profits, Google's management has curbed some of the generous employee perquisites that have been a company hallmark for the past decade. It has closed some company cafeterias that serve free meals and last month withheld a $1,000 holiday gift that's traditionally distributed to all employees. Instead, the company handed out free cell phones that run on Google software -- a gift that management valued at about $400."(AP via The New York Times; free registration required)

A Wisconsin County Imposes Domestic Partner Benefits Mandate on Government Contractors
Excerpt:"Government officials for a Wisconsin county now require contractors with agreements worth $5,000 or more to offer health benefits to the domestic partners of their employees. A news report in the Madison, Wisconsin, Capital Times said the Dane County Board issued the mandate at a meeting last week. The county already offers domestic partner benefits to its own employees."(PLANSPONSOR.com; free registration required)

[Official Guidance] Text of OMB Advance Notice of Proposed Regs on Harmonization of PPA Funding Rules with Federal Cost Accounting Standards for Contractor Reimbursement
Excerpt:"SUMMARY: The Office of Federal Procurement Policy, Cost Accounting Standards Board, invites public comments concerning an Advance Notice of Proposed Rulemaking on the harmonization of Cost Accounting Standards 412 and 413 with the Pension Protection Act of 2006. DATES: Comments must be in writing and must be received by November 3, 2008."(U.S. Office of Federal Procurement Policy, Office of Management and Budget)

New Mexico Attorney General Upholds Health Coverage Requirement in State Contracts
Excerpt:"Attorney General Gary King issued a decision upholding the authority of the Governor's Office to require state contractors to demonstrate health coverage for their employees. Gov. Bill Richardson issued the executive order, which went into effect in July. It requires contractors with six or more employees to demonstrate that they offer health coverage in order to do work with the state."(New Mexico Business Weekly via bizjournals.com; free registration required)

[Guidance Overview] IRS Guidance on Deduction for Leased Employees'Meals and Incidental Expenses–and Dismissal of'Common Law Employee'Relevance
Excerpt:"The most recent travel and entertainment expense issue involves deductions for meals and incidental expenses as covered in IRC§274(d)(1). That provision dictates the substantiation required to use that deduction and IRC§274(n) generally limits that deduction to only 50 percent of meals and incidental expenses (M&IE) actually incurred . . . ."(Deloitte via BenefitsLink.com)

Worker Misclassification - Creating Employee Benefit Problems
Excerpt:"In addition to the problems of having insurance coverage defeated based upon'employee'definitions, inadvertently promising benefits to those you did not intend, and jeopardizing the qualified status of your retirement plans, there is a another significant issue - ERISA preemption may not be available as a defense to claims brought by independent contractors."(Health Plan Law blog by Attorney Roy F. Harmon III)

[Guidance Overview] Deduction Limit for Meals/Incidental Expenses Paid to Leased Employees Addressed
Excerpt:"The IRS has issued a ruling addressing which party is subject to the percentage limitation for the deduction of meal and incidental expenses (M&IE) paid to leased employees. The ruling holds that the percentage limit applies to the party that ultimately bears the per diem expense, regardless of which party is the employer under the common law rules."(CCH Incorporated)

OMB Announces New Cap on Executive Compensation Costs in Federal Contracts
Excerpt:"The ceiling on executive compensation costs under government contracts is $14,284 higher in fiscal 2008 than in fiscal 2007, according to an administration memo released Tuesday."(National Journal Group, Inc.)

WSJ Examines How Federal Government Use of Contract Workers Contributes to Number of Uninsured U.S. Residents
Excerpt:"The use of contract workers by the federal government is'quietly'contributing to the number of uninsured U.S. residents because some of the contractors do not offer employee health benefits, the Wall Street Journal reports."(Medical News Today)

[Guidance Overview] Seventh Circuit Rejects FedEx's Request To Review Class Certification
Excerpt:"According to a CNN news report, a Seventh Circuit panel rejected FedEx's request to review the nationwide class certification of the drivers'claim for employee benefits under the Employee Retirement Income Security Act (ERISA) and other state claims. Central to the case is the classification of workers as independent contractors. The decision clears the way for further proceedings in the nationwide class action suit that involves thousands of workers."(Health Plan Law blog by Attorney Roy F. Harmon III)

IRS Says FedEx Misclassified Some 13,000 Workers
Excerpt:"According to a filing with the Securities and Exchange Commission (SEC), FedEx said the IRS has tentatively concluded, subject to further discussion with the firm, that FedEx Ground's pick-up-and-delivery owner-operators should be reclassified as employees for federal employment tax purposes.'(PLANSPONSOR.com; free registration required)

Notes on the Strike of the MTV'Permalancers'
Excerpt:"A group of self-described'permalancers'--permanent freelancers who receive fewer benefits than official full-time employees--just went on strike and are picketing the headquarters of Viacom, MTV's parent company. As reported by the New York Times: Waving signs that read'Shame on Viacom,'the workers, most of them in their 20s, demanded that MTV Networks reverse a plan to reduce health and dental benefits for freelancers beginning Jan. 1."(Workplace Prof Blog)

Judge Allows FedEx Drivers to Sue for Benefits As Group
Excerpt:"U.S. District Judge Robert Miller in South Bend, Ind., said the drivers could proceed with a class action against FedEx on claims that they deserve full-time benefits under federal law."(Bloomberg News via Los Angeles Times; free registration required)

Text of S. 2044 --''Independent Contractor Proper Classification Act of 2007''(PDF)
11 pages. Excerpt:"To provide procedures for the proper classification of employees and independent contractors, and for other purposes."(U.S. Senate via American Benefits Council)

Please Take Survey by IRS Advisory Group: Improving the Employee Plans Compliance Resolution System
Are an attorney, accountant, actuary, consultant, third-party administrator, financial services provider, or other kind of retirement plan practitioner? Please help an official IRS advisory group supply the IRS with ideas for improving the Employee Plans Compliance Resolution System, by completing this online survey or emailing your response to the group. The deadline is the end of next week (October 19). These recommendations will address, but not be limited to, the directive to the Secretary of the Treasury under the Pension Protection Act of 2006 to continue updating and improving EPCRS. (IRS Advisory Committee (ACT) on Tax Exempt and Government Entities)

Senators Obama and Kennedy Introduce Measure Eliminating Safe Harbor for Independent Contractors
Excerpt:"Senators Barack Obama (D-IL) and Edward Kennedy (D-MA) have introduced a bill that would eliminate an existing safe harbor in tax law that protected employers that had properly classified individuals as independent contractors based on existing IRS rulings. The'Independent Contractor Proper Classification Act'(S. 2044), would also prohibit employers from relying on established industry practice as a basis for classifying individuals as independent contractors . . . ."(HR Policy Association)

Watson Wyatt Comments on Pension Harmonization for Government Contractors
Excerpt:"The Pension Protection Act of 2006 (PPA) requires the Cost Accounting Standards Board (CASB) to harmonize the PPA's funding requirements with the cost accounting standards applicable to government contractors by January 1, 2010. Watson Wyatt has filed comments with the CASB regarding the harmonization project . . . ."(Watson Wyatt Worldwide)

Presentation: ESOPs and Government Contractors (PDF)
35 pages. (Morgan, Lewis&Bockius LLP)

Excellent Resource for Breaking Courts of Appeals Cases on ERISA Matters
The link we've provided for you sorts the cases by date; newest cases appear up top. Definitely one to bookmark! (FindLaw.com)

DOE Scraps Plan to End Pension Reimbursements
Excerpt:"The Department of Energy will not put in place a plan to stop reimbursing contractors for defined benefit pension plan costs, a DOE spokeswoman said . . . ."(Business Insurance)

Investigating Mislabeling of Workers in New York
Excerpt:"Gov. Eliot Spitzer is planning to step up enforcement against thousands of companies that illegally misclassify workers as independent contractors to cheat on taxes and skimp on employee benefits, the state labor commissioner said . . . ."(The New York Times; free registration required)

Chamber Comments on DOE Contractor Employee Pension&Medical Benefits Challenge (PDF)
3 pages. (U.S. Chamber of Commerce)

Group Comments: Department of Energy Contractor Employee Pension and Medical Benefits Challenge (PDF)
Excerpt:"The . . . organizations submit this letter in response to the request for comments from the Department of Energy ('DOE') as posted in the Federal Register on March 27, 2007."(American Benefits Council)

Comments on Department of Energy Contractor Pension and Medical Benefits Cost Challenges (PDF)
5 pages. Excerpt:"[The Council is] not suggesting that there are simple answers. But we are suggesting that there are tools available to reduce the volatility associated with defined benefit plans. The Council believes that for some employers the challenges posed by volatility are offset by the value they are able to still receive by continuing to sponsor defined benefit pension plans for their employees."(American Benefits Council)

Testimony at House Committee Hearing on Effects of Misclassifying Workers as Indep Contractors
Excerpt:"Congressman Jim McDermott (D-WA), Chairman of the Subcommittee on Income Security and Family Support, and Congressman Richard Neal (D-MA), Chairman of the Subcommittee on Select Revenue Measures [held] a joint hearing on the effects of misclassifying workers as independent contractors [on May 8]."(U.S. House Committee on Ways and Means)