33rd Annual National UI Issues Conference

Transcription

1 33rd Annual National UI Issues Conference Misclassification of Workers and Independent Contractor Issues Presented by Denise Samuel June 18-20, 2014

2 We Will Discuss: Definitions: Guidance: Issues: Solutions: Opened Forum: Employee vs. Independent Contractor USDOL Instructions and Audit Measures Issues we face when identifying misclassified workers Things that work: Proven methods and resources What works for your agency? 2

3 Employee vs. Independent Contractor Definition - Independent Contractor Independent contractor performs services for an employer but the employer only controls or directs the result of the work and not what will be done and how it will be done. Definition Employer An individual who performs services for an employer and the employer exercises direction and control regarding the what will be done and how it will be done. Key Factors: Direction and Control 3

4 Employee vs. Independent Contractor Categories of Evidence Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Financial: Are the business aspects of the worker s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? 4

5 Employee vs. Independent Contractor Other considerations when identifying someone as an independent contractor may include: If the worker supplies his or her own equipment, materials and tools If all necessary materials are not supplied by the employer If the worker can be discharged at anytime and can choose whether or not to come to work without fear of losing employment If the worker control the hours of employment thus indicating they are acting as an independent contractor Whether the work is temporary or permanent 5

6 USDOL Instructions and Audit Measures Unemployment Insurance Program Letters (UIPL) and Advises on changes in evaluating UI audit programs through new measures that: 1. Include factors of worker misclassification detection and enforcement 2. Is the new Core Measure in the UI Performs management system 6

7 USDOL Instructions and Audit Measures Effective Audit Measurement and Minimum Scores Percent of Contributory Employers Audited 1 Percent of Wages Changed as a Result of the Audit 2 Percent of State s Total Wages Audited 1 Average Number of Misclassified Workers Discovered Per Audit 1 Subtotal 5 Plus: State-Directed Emphasis for Individual Factor(s) 2 Minimum Total Score to Pass 7 7

8 Issues When Identifying Misclassified Workers Auditing the Right Employers- The Audit Selection Process Lack of Resources or Using Existing Resources in a Different Way Training Uninformed Work Force Limited Access to Information Limited Technology 8

9 Proven Methods and Resources IRS Extracts USDOL/ETA (Local and National) TPS Reviews Blocked Claims Wage Investigations Regular Monitoring Increased Number of Large Audits 9

10 Proven Methods and Resources Technology Educated Workforce Tips and Referrals Employee Committee Groups IRS Governmental Liaison Data Exchange Community of Practice The Entire State Workforce Community 10

11 What is Georgia Doing? Communicating Expectations- Our Methodology for Selecting Audits Making sure that we re counting correctly $0 (zero) Tax and Wage reports IRS Extracts Reviewing No Change Audits 11

12 What is Georgia Doing? Querying Employers with Multiple Wage Investigations Exploring Resource Options Updating Training Looking Towards Technology for Help SQSP 12

13 What works for your agency? 13

14 Resources UIPL No dated September 2, 2010 UIPL No dated December 30, 2010 UI Reports Handbook No. 401, ETA 581 Contribution Operations IRS Website- IRS Publication Independent Contractor? or Employee? 14