The McLane Law Firm was pleased to host a seminar on Working with Independent Contractors on April 11 at the firm’s TradeCenter office in Woburn.
Businesses look to hiring independent contractors for a number of reasons. Some of the benefits of using independent contractors include a less-expensive alternative that allows a business to reduce its workforce; pay contractors with a fixed amount documented by a Form 1099 instead of a W-2; have no taxes withheld; and pay no fringe benefits.
Hiring independent contractors should be done very carefully. The U.S. Department of Labor (“DOL”) announced in September 2011 that it would be entering into memoranda of understanding with states and the IRS to curb misclassification of workers. This memoranda of understanding is in place with Massachusetts DOL.
To protect workers and ensure employers are not misclassifying employees as independent contractors, the Massachusetts Attorney General has created a Taskforce on the “Underground” Economy and Employee Misclassification. Since the launch of the taskforce, millions of dollars in revenue has been recovered and the taskforce has conducted more than 500 investigations.
The Takeaways for Massachusetts employers:
•The Massachusetts Wage and Hour Division has created The “ABC” Test to help employers avoid worker misclassification
•Under The “ABC” Test, it is nearly impossible to be considered an independent contractor
•The burden is on business to prove each element of the test
•There are severe consequences for businesses that misclassification
McLane’s Business Seminar Series provides educational seminars to business owners and managers. For more information about the McLane Business Seminar Series, visit the McLane website at www.mclane.com or contact Jeannette Riendeau at [email protected].
About the McLane Law Firm
Founded in 1919, the McLane Law Firm is the largest full-service law firm in the state of New Hampshire, with offices in Manchester, Concord and Portsmouth and Woburn, MA. Driven by the firm’s depth of sophisticated legal expertise and an unwavering commitment to client service, McLane has built collaborative and lasting relationships with a broad spectrum of domestic and international clients. www.mclane.com @McLane_Law