Articles Posted in Department of Labor & Independent Contractors

Published on:

Audit.Rip.Through.Newspaper.Dollar.Photo.Club.9.11.15.jpgHave you received a Notice of Audit or Investigation from the Department of Labor? If so, this is a serious notice. The worst thing you can do is to ignore the notice because the Department may take action without any input from you. Typically, the notice requests that you schedule a time to meet with an investigator and produce certain books and records. If you are not prepared by that date, the audit can lead to substantial penalties and additional governmental investigations. Since this is a legal inquiry, it is best to obtain an experienced employment law attorney to guide you through this process. Our Award Winning New York Employment Lawyer successfully has represented companies who are being audited by the Dept of Labor.
Continue reading →

Published on:

I Was Misclassified by New York State and Denied Retirement Benefits

Freelancer.Image.Dollar.Photo.Club.3.9.15.jpgIn recent years, there has been a significant increase in the number of employees who have been misclassified as independent contractors. A misclassified worker can lose rights to overtime pay and participation in employee benefits, including service in the retirement system. The effects of misclassification can be significant to employers and workers. This blog post discusses the one major effect suffered by misclassified New York State workers – denial of the right to participate in the state’s retirement plan. This loss of retirement benefits can be substantial for long-term public workers. Our Award Winning New York Employment Law Attorney has advised workers and companies on misclassification issues and can help you. Contact our office to learn your options and rights.
Continue reading →

Published on:

Crisis.Business.Man.Umbrella.Dollar.Photo.Club.1.20.16.jpgYou can face a serious crisis if you do not know the difference between an employee and independent contractor and misclassify your workers. Our Award Winning New York Misclassification Lawyer has educated companies and employees on legal issues affecting both sides of the working relationship.

The IRS believes that millions of workers have been misclassified as independent contractors instead of as employees and in doing so, the government has been denied substantial payment of employment-related taxes. The federal and state government have increased their efforts to crackdown on misclassification cases. Today’s blog post will discuss the IRS’ SS-8 Program (i.e., The Determination of Worker Status Program), which enables a company or a worker to request that the agency issue a determination letter stating whether an employee or an independent contractor for federal purposes. This determination can have significant tax implications for the worker and company and can cause a number of other issues for the company. It is important to get experienced employment law counsel from the outset because of the severity of the potential ramifications including class-wide claims in other forums.
Continue reading →

Published on:

Are you prepared for a Department of Labor Audit or Investigation? Why you need to know the definition of an Independent Contractor Now

DOL.Audit.in.Hand.Dollar.Photo.Club.1.18.16.jpgMore and more employers are being kept up at night because of risks associated with misclassifying their workers as independent contractors instead of employees. In the past, misclassification was not a significant area of litigation or administrative enforcement; however those days are over. Employers must take proactive steps to ensure they are in compliance and have implemented best practices before a lawsuit or Department of Labor audit is commenced. A pressing concern for employers is the lack of intent required in these cases. A well-meaning employer can find itself facing serious legal exposure even if the workers do not complain. For example, even if a company and a worker agree that he or she is a contractor and they sign an agreement to that effect – that is not sufficient. The courts or administrative agency will do a fact specific investigation and determine the worker’s proper status. This is an issue companies need to get in front of now.
Continue reading →

Published on:

NYS Labor Department Audit, Investigation and Risks

Audit.Rip.Through.Newspaper.Dollar.Photo.Club.9.11.15.jpgIf you receive a notice from the NY Department of Labor (DOL) UI Division, it is important that you take it seriously. An audit is a serious matter that can have a significant impact on your business. Over the past few years, the DOL has increased the number of investigations and audits of businesses to ensure that they are compliant with NYS labor laws. This audit may focus on whether you have properly classified your workers as employees and independent contractors. A misclassification of worker status can lead to penalties, fines and potentially other government review. Our Award Winning Labor Department Attorney has represented businesses in a variety of industries (transportation, delivery companies, photographers, media, entertainment, personnel agencies, medical offices, IT companies and other services related businesses) and helped them understand their obligations under the law, their potential exposure and how to develop best practices to protect their business. We have discussed the misclassification issue and a Labor Department Audit before. This blog will focus on what the potential penalties and consequences if your business is found liable in an audit or related matter. These cases are increasing and affecting companies of all sizes including Uber, Handy, Amazon and Google. It is important to seek counsel from an experienced employment lawyer to understand the process and rights from the outset.

Why Would a Business Try to Misclassify A Worker as an Independent Contractor Instead of an Employee?

Many businesses treat workers as independent contractors and not as employees in a method to avoid paying payroll taxes and to avoid workers from collecting unemployment insurance benefits and gaining coverage under workers compensation law and employment discrimination statutes. These businesses may not realize that just calling a worker an independent contractor is a very risky practice and will not have the intended results. The DOL and courts will examine the working relationship between the worker and the company. While the specific test for worker status varies by agency, our attorney has lectured on some of the key factors. If the worker was misclassified, there could be serious consequences. A well meaning business can face these same consequences as well because intent is not a factor in a misclassification analysis. So, if a worker asks you to treat him or her as a contractor and not an employee – do your own analysis and understand your risks – even if the worker at issue does not complain, your business could be subject to an audit randomly or due to another complaint.
Continue reading →

Published on:

Fighting a Labor Department Audit

DOL.Audit.in.Hand.Dollar.Photo.Club.1.18.16.jpgEvery New York Business is subject to an audit by the Department of Labor. Whether an audit was commenced due to a complaint, randomly or otherwise, it is critical for businesses to be prepared for the DOL investigator’s visit. While you cannot control entirely whether your business is selected, you can control your exposure and response by taking proactive steps. This blog post will generally discuss what to do if you receive a NY DOL Audit Notice. For specific advice on your situation and your potential exposure, if any, contact our office for a confidential consultation.

If you have received a notice, it is of paramount importance that you appropriately respond to it. Failure to respond can lead to a subpoena and other actions as the DOL will perceive you as being uncooperative and obstructive. This can lead to unfavorable results.

What is the Purpose of the DOL Audit?

The agency is seeking to determine if you are in compliance with your legal obligations as an employer. If you are not in compliance, you may be issued penalties, fines and back wages – this can depend on the type of audit. An audit can be triggered by the federal government (US DOL) or the state (NY State Dept of Labor). The state agency has multiple divisions responsible for investigations – the Unemployment Insurance (UI) and the Labor Standards. The UI tax division may focus on whether your business properly reported employee wages and paid the appropriate payroll taxes. The Labor Standards Division may focus on whether you paid your employees the appropriate minimum wages and overtime pay. This blog post will generally discuss an audit from the UI tax division.
Continue reading →

Published on:

Surviving a NY Department of Labor Audit

Audit.Rip.Through.Newspaper.Dollar.Photo.Club.9.11.15.jpgOur Award Winning New York Department of Labor Attorney has counseled many small businesses in developing best practices and how to protect their interests during a Department of Labor Audit. Call our office for a confidential consultation if you have you received a notice from NY, which states:

Dear Employer: In accordance with Section 575 of the Unemployment Insurance (UI) Law, the NYS Department of Labor (DOL) conducts audits of employers to ensure compliance with the Law. This helps to protect the integrity of the Unemployment Insurance Trust Fund. Your account has been selected for an Examination. Please call me by January 10, 2016, to schedule an appointment. The Unemployment Insurance Division Auditor will visit your place of business and meet with you to discuss the purpose of the audit.

You should not ignore this notice and prepare to take appropriate action. If you ignore the notice and are deemed uncooperative, you may receive a subpoena compelling you to respond. If you ignore the subpoena, the DOL may issue its own findings based on its estimates and investigation. Depending on your circumstances, cooperation can be helpful. The notice (or subsequent subpoena) typically asks you to provide the following documentation and information:

  • General Ledger
  • Federal Income Tax Returns
  • Payroll records
  • Federal and State payroll tax returns such as Forms 941’s, 940’s, NYS-45, W-2’s, and W-3’s
  • Check Registers and Bank Statements
  • Records pertaining to services by freelancers or contractors
  • Documents showing off the books payments to workers
  • Founding documents such as a corporate minute book or related materials
  • Current Workers’ Compensation policy
Initial Steps to Consider

Continue reading →

Published on:

STOP THIEF!

NEW EFFORTS TO PROTECT WORKERS IN NEW YORK

Thumbnail image for overtime-1.jpgIn these difficult economic times, it is not uncommon for workers find themselves taken advantage of by unsavory and corrupt business practices. Workers who are paid in cash, off-the-books, and whose work schedules vary from day-to-day, week-to-week, or month-to-month are particularly vulnerable to exploitation from their employers. Our Award Winning New York Employment Attorney discusses New York State’s latest efforts to combat worker exploitation.

Published on:

Audit.Rip.Through.Newspaper.Dollar.Photo.Club.9.11.15.jpgOur Award Winning New York Labor Department Attorney provides advice and counsel to businesses to implement best practices and compliance regarding employment law issues. It is critical to become compliant before a lawsuit or audit is commenced against you. In recent years, the United States and New York Department of Labor have increased their efforts in targeting in how businesses use independent contractors. In fact, the federal government and state governments work together on these issues now. It is tempting for businesses simply to call workers independent contractors so they can avoid paying payroll taxes and providing the workers with benefits and protections afforded to employees. While that be tempting, businesses must do a careful analysis of the worker’s responsibilities and role to determine if the worker is truly an employee or independent contractor. As we have discussed before, a mistake can be costly as it can result in penalties, fines, a bill for unpaid payroll taxes, governmental audits (not just by the Department of Labor), a lawsuit (potentially a class action) and more. Proactive steps are crucial in these situations. If you have any questions about implementing best practices to protect your business or have received a Notice of Audit from the Department of Labor, contact our office at (800) 893-9645 for a confidential consultation to learn your rights, options and next steps.

Independent Contractor versus Employee

The test for determining the proper worker classification can vary depending on the government agency and forum. This blog post will generally discuss the common law test articulated by the New York Court of Appeals regarding the New York Labor Law. Some of the factors considered include:

Published on:

Female.Business.Person.jpgHave you properly classified your workforce? Are you sure? If not, the wrong answer could turn out to be a very costly mistake. Just ask Mary Kay Cosmetics, which was hit with a jury verdict for over ten million dollars. The Mary Kay case is discussed below. If you are not sure about your workplace practices, you should speak with an experienced employment lawyer to ensure your business is in compliance before any action is commenced against you. The issue of whether a worker is an independent contractor or an employee is a hot area for investigation and litigation. Cases are on the rise. The ramifications can be significant. This is an area where proactive steps are much better than reactive steps once you are in litigation and the alleged damage has already occurred.

Claudine Woolf v. Mary Kay Cosmetics, Inc.

Ms. Woolf sued Mary Kay for disability discrimination. In short, Ms. Woolf alleged that she was one of the Company’s top sales directors and was denied a reasonable accommodation after she learned that she had breast cancer during her pregnancy. Mary Kay argued that Ms. Woolf was an independent contractor and not an employee and thereby not entitled to protections under the Americans with Disabilities Act (ADA) and the state human rights law.