independent contractors Archives - EMPLOYEE BENEFITS BLOG

Webinar Replay: New Employee Benefits Requirements for Part-Time Employees, Independent Contractors

by Brian Tiemann and Joseph K. Mulherin | Apr 9, 2024 | Employee Benefits, Retirement Plans

If you employ part-time workers and/or engage independent contractors, sit up and take note: 2024 brings significant changes to how you must manage your workforce. The US Department of Labor’s (DOL) revised Independent Contractor Rule introduces additional uncertainty as to how the agency and perhaps courts will decide independent contractor misclassification disputes. Provisions of the SECURE 2.0 Act, meanwhile, will simultaneously impose a new mandate for employers to provide part-time workers with expanded access to retirement benefits.

In this webinar, McDermott Partners Brian J. Tiemann and Joseph K. Mulherin, along with Tom Robertson of Graystone Consulting, discussed the steps employers must take to ensure compliance with these new regulations taking effect in 2024.

Topics included:

How the SECURE 2.0 Act, starting this year, expands the criteria under which employers must offer part-time employees the opportunity to participate in employer-sponsored 401(k) and 403(b) retirement plans
The DOL’s changes to its Independent Contractor Rule, compliance considerations, tips for strengthening the independent contractor argument and mitigating misclassification risks
Other benefits considerations employers must be aware of if required to reclassify workers, such as the mandate to provide employee health insurance under the Affordable Care Act

Access the webinar.

Global Labor and Employment Legal Update

by McDermott Will & Emery | Jan 18, 2024 | Employee Benefits, Employment

Following a dynamic 2023 coupled with a continually evolving legal landscape, employers may feel that they are left with more questions than answers. During a recent webinar, McDermott’s employment team took a dive into the most pertinent legal updates of 2023 and shed light on uncertainties to prepare employers for the year ahead. The discussion covered new laws taking effect in 2024, explored key developments impacting the workforce and advised on what employers can expect heading into the new year.

Access webinar recording and key takeaways.

The FTC’s Noncompete Plans Are Part of a Sea Change for Business

by Michael W. Peregrine | Feb 9, 2023 | Employee Benefits, Employment

The Federal Trade Commission’s newly proposed rules that would prohibit most noncompete clauses in employment represent a seismic shift for business. In this Barron’s article, McDermott Partner Michael Peregrine says corporate leadership should “take very seriously” the threat that federal antitrust policy presents to business operations and strategic development.

“This government activity has risen to a level that demands serious board and executive attention as a possible corporate enterprise risk,” Peregrine writes.

Access the article.

AB 5 Contractor-Classification Battles Set to Heat Up in 2021

by McDermott Will & Emery | Mar 4, 2021 | Employment, Labor

Employers grappling with independent-contractor classification had a busy 2020—and should expect a flurry of additional activity this year. Few areas in employment law are changing as rapidly. Last year, many concerned about the future of contractor-classification laws paid careful attention to California and AB 5, which went into effect on Jan. 1, 2020, and codified the California Supreme Court’s landmark decision in Dynamex Operations West Inc. v. Superior Court of Los Angeles.

In a recent article for Law360, McDermott partners Ellen Bronchetti and Ron Holland consider the impacts of the California law on the gig economy, employer classification tests and organized labor in the United States.

Access the article.

Hurry Up and Wait: Department of Labor Delays Implementation of New Worker Classification Regulations

by P. Kevin Connelly and McDermott Will & Emery | Feb 16, 2021 | Employment, Labor

Businesses strive to draw the line correctly on who is an employee versus who is an independent contractor. New regulations issued by the Department of Labor (DOL) in early January promised to help. See, 29 CFR §§795.100. But by late January, those regulations under the Fair Labor Standards Act (FLSA) were frozen.

Unlike laws passed by Congress, administrative regulations are far more easily altered when a new president takes office. The regulations published by President Trump’s DOL in January had an effective date of March 8, 2021. Now, President Biden’s DOL will have an additional 60 days beyond that effective date to announce what will happen next.

Those new regulations provided a much simpler test for classifying workers. While including five factors, the results turned on two of those factors: (1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit/loss based on personal initiative or investment. Most significantly, those regulations focused on the actual practices, rather than what may be possible.

This same issue may also arise under other federal statutes as well as state laws, including those governing on whom unemployment insurance taxes must be paid. With multiple statutes (each with its own distinctive test), drawing the line between independent contractors and employees correctly turns not only on meeting whatever the ultimate FLSA test turns out to be.

The most difficult is the so-called ABC test:

The worker is free from the control and direction of the hiring entity in connection with the work’s performance, both under the contract for the performance of the work and in fact.
The worker performs work that is outside the usual course of the hiring entity’s business.
The worker is customarily engaged in an independently established trade, occupation or business of the same nature as the work performed.

That is the test that is embedded in proposed federal legislation: the Protecting the Right to Organize (PRO) Act. That is also now the official test for most jobs under most California laws.

Will the Biden Administration Upend Workplace Law?

by McDermott Will & Emery | Jan 5, 2021 | Employment, Labor

Joe Biden’s ascendance to the presidency not only spells doom for many of the Trump administration’s business-friendly employment policies; it also may place established tenets of federal labor law on the chopping block. Biden may bring with him to the White House an ambitious pro-labor platform aimed at giving workers and unions a leg up after four years in which the Trump administration moved the legal needle sharply in employers’ direction.

A recent article in Law360, featuring McDermott partner Ron Holland, outlines four areas that labor and employment lawyers should watch after the Biden transition.

Access the article.

Employment Cases to Keep an Eye on in 2020

by Michael J. Sheehan | Jan 2, 2020 | Employment, Labor

This year, the US Supreme Court will get a chance to say whether federal civil rights law protects gay and transgender employees from discrimination, and California courts will grapple with recent changes making it harder for Golden State businesses to label workers as independent contractors. McDermott’s Michael Sheehan looked at these and other cases to watch in 2020 in a recent article for Law360.

Access the full article.

Originally published by Law360, January 2020

A New Landscape for Businesses with California Operations, Thanks to A.B. 5

by Marjorie C. Soto Garcia and Yesenia M. Gallegos | Sep 26, 2019 | Employment

This month, Assembly Bill 5 (A.B. 5) was signed into California law. A.B. 5 codifies the “ABC Test”—used to determine if a worker is an independent contractor—which is broader, harsher and more inclusive than the common law test with which most businesses are familiar.

A.B. 5 appears to be the death knell of convenience for retaining contractors in the Golden State, as well as the advent of a new wave of wage and hour litigation.

Access the full article.

Payroll Get Ready — Employers Face New January 31st Filing Deadline for W-2 and 1099-MISC Forms

by Jeffrey Holdvogt and Ruth Wimer | Nov 10, 2016 | Employment

Beginning with W-2 forms filed with respect to 2016 wages, a new law requires employers to file the government copy by January 31, 2017, for both paper and electronic copies. The accelerated deadline also applies to 1099-MISC forms for independent contractors.

Read the full article.

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