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May 11, 2010
Classifying Workers as Independent Contractors in Organizations

In a BLR webinar entitled ‘Employee versus Independent Contractor: Where’s the Line? How to Make the Proper Call and Stay Out of Court’, Maria Anastas discusses the importance of properly classifying independent contractors. Misclassifying an employee as a contractor can result in costly penalties and back tax claims. Maria Anastas shares practical tips and strategies that can be used to deal with issues surrounding employee and independent contractor classifications. She also describes who an employee is and provides the following information about misclassification mistakes:

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  • Misclassification mistakes can result in millions of dollars in damages for an employer
  • It is a particularly critical issues for employers
  • Federal and state authorities are focused on employee misclassification because it has resulted in the underpayment of billions of dollars in taxes
  • Legislative efforts have been undertaken to address employee misclassification issues
  • The Internal Revenue Service (IRS), the Department of Labor, the Equal Employment Opportunity Commission, the Social Security Administration, the State Labor and Unemployment Compensation department and numerous other groups are all interested in knowing if a worker is an employee or an independent contractor
  • Apart from tax consequences for misclassification of workers, there are also other consequences from Employment Retirement Income Security Act (ERISA), wage and hour issues and unemployment compensation liabilities
  • Audits by groups such as the IRS, regarding the misclassification of workers in an organization, are possible
  • There are also campaigns to educate workers regarding their rights

Maria Anastas is a partner in the San Francisco office of law firm Ogletree, Deakins, Nash, Smoak & Stewart, PC ( ). She represents employers in labor and employment law matters exclusively, with a primary emphasis on traditional labor matters. She handles union organizing drives and corporate campaigns, collective bargaining and arbitration, and proceedings before the National Labor Relations Board (NLRB). She also devotes a substantial portion of her practice to providing employers with practical advice on a wide variety of employment law issues. She can be reached at

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