Reassess Independent Contractor Classifications Now in Light of President Obama's Proposed Budget


Thanks to President Obama's budget proposal for the 2011 fiscal year, released on February 1, 2010, the Department of Labor may be one of the few employers to soon experience rapid growth. The President's proposal would add 100 new enforcement personnel and increase the agency's overall budget by $25 million. The increase is part of a larger plan for the Treasury and Labor Departments to join efforts in addressing the misclassification of workers as independent contractors – something the President views to be a cause of the $350 billion tax gap, which is the sum of noncompliance with tax law. He argues that cracking down on misclassifications over the next ten years will increase federal coffers by $7 billion over the same period.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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