The Pros And Cons Of Mischaracterization

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With the economy beginning to rebound, many companies are looking for every way possible to save money and/or maximize profits. One of the biggest costs incurred by any business is labor. Consequently, employers sometimes attempt to minimize this expense by utilizing independent contractors instead of employees. There are potential risks for employers who mischaracterize an employee as an independent contractor, because, while it may save payroll taxes and other benefit costs in the short term, it may lead to penalties on such taxes as well as other inadvertent violations of worker’s compensation laws, FMLA, etc, which each hold separate penalties for violation. While there are potential Federal issues associated with mischaracterizing…show more content…
(b) Except for an agreement with the principal relating to the completion schedule, range of work hours or, if the work contracted for is entertainment, the time such entertainment is to be presented, the person has control over the time the work is performed. (c) The person is not required to work exclusively for one principal unless: (i) A law, regulation or ordinance prohibits the person from providing services to more than one principal;

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