Accurate worker classification is important in every industry and for every company–large or small. That said, any business that relies on a contingent workforce is especially vulnerable. The Biden administration’s decision to rescind the Worker Classification Rule made it easier for workers to argue for minimum wage and overtime protections/compensation. We’ve all seen headlines for the big companies, but companies without recognizable names are facing the same challenges. Smaller companies may try to take the “blissful ignorance” route and face costly consequences later. Ride share companies frequently make headlines, but lately, we’ve seen multiple companies in the healthcare industry end up in hot water.
Why is it so Easy to Make Mistakes?
The gray area between W-2 employees and independent contractors is getting increased attention from the Department of Labor. Every time a new piece of legislation passes in this area, it seems to make the distinction between workers less clear. But one aspect of the trend is clear: It’s getting harder and harder to accurately and safely classify workers as independent contractors. With the big headlines, you’ll find big fines. They’ve cost Uber over $100 million in settlements, with some cases still pending. Still, while it may be tempting to think of this as a big company problem, it’s not true.
Between increasingly-savvy workers and a Democratic-led administration, smaller companies are vulnerable to big problems, too. For example, this at-home healthcare services provider was recently found responsible for over $358K in back wages and this therapy firm’s $9 million bill packed a big punch.
The Bottom Line
It just isn’t worth it to try to avoid the rules or get away with not knowing them. Ignorance doesn’t hold up in a court of law. Paying close attention to accuracy pays dividends. At PayReel, compliance comes first. We classify your employees properly, and we also pay them properly so that you can hire who you want exactly when you want them. If gray areas aren’t your thing and the term “lawsuit” makes your heart skip a beat—relax, we got it. Contact us around the clock at 303-526-4900 or email us here.
