Very early in my career, I got a good piece of advice: “Never do a business deal you wouldn’t want your kids to read about in the morning paper.” Alas, if only the Madoffs, Murdocks, and Nacchios of the business world had been privy to such sage wisdom.
Still, how many of us risk getting our 15 minutes of fame the hard way when it comes to hiring so-called Independent Contractors? Let me quickly say that some of my best friends are IC’s … legitimate IC’s. Contractors fill an indispensable role in our economy by providing highly-skilled, variable-cost resources. As with many professions, however, the dishonest or misinformed few cast a cloud of suspicion over the rest.
Okay, so let’s come clean. Haven’t we all, at some point or another, done a mental calculation of the odds of getting caught misclassifying a worker? Or rationalized the potential fines and penalties simply as a cost of doing business? Or even convinced ourselves that we can interpret complex labor law better than some fresh-faced IRS auditor?
Sure I have. But then I come back to this image of my son flipping through the morning paper and seeing this headline: “Your Dad Knowingly Broke The Law. Mom’s Pissed.”
It’s the “knowingly” part that I wonder how I’d explain. Even though federal and state labor laws are complex, there are plenty of resources available to help figure them out … Just Google “misclassifying workers.”
This is more than the corporate equivalent of a speeding ticket I’m talking about here. Company reputation, your credibility, employee morale, the average penalty of $80,000 per misclassified employee, your kid’s respect … that’s what’s at risk.
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