On Worker Classification and Regulatory Audits | DCR Workforce Blog

On Worker Classification and Regulatory Audits

Have you ever wondered at the mind-boggling number of contradictory messages we get from this world? If you are wondering what on Earth I am trying to get at, I could give you any number of examples to prove my point. Absence makes the heart grow fonder; right? Then how do you explain – Out of sight, out of mind!? I am sure you got my drift.

Now let me explain what brought this to my mind, when I want to talk to you about compliance. We may have seen someone or the other getting away with murder, but that is no reason why we should whip out that concealed weapon and start hacking away. Rules are not made to be broken. It pays to be extra cautious to make sure that we are not violating any regulation rather than to be careless and casual about such matters, ending up with a serious compliance issue that could wipe away the fruits of years of toil, among other things.

Worker classification is definitely one such issue. Independent Contractor classification must be preceded by a proper vetting process that ensures survival through audits and scrutiny. As more and more employers are trying to save costs using contingent workers, regulatory bodies like the Internal Revenue Service, the Department of Labor and the State bodies overseeing unemployment insurance and workers’ compensation are all gearing up to enforce the various rules – through stepped up audit activities.

Make sure you or anyone working with you never classifies an employee as an Independent Contractor without going through the required process. You could end up facing innumerable queries, audits, penalties and punishments over issues like payroll taxes, health and retirement plans and other benefits. As always in these matters, it is better to be safe than sorry!

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.