The fiscal year 2013 budget recently proposed by President Obama earmarks $14 million in funding for the U.S. Department of Labor to “detect and deter” companies from misclassifying employees as independent contractors, with $10 million to be given as grants to states to uncover instances of misclassification and recoup unpaid taxes and $4 million for the DOL to launch investigations into misclassification. The DOL’s 2013 budget devotes funding to hiring another 35 full-time investigators to handle misclassification, with the agency noting that it will maintain an “increased presence in those industries where the misclassification of employees as independent contractors is prevalent.” Therefore, companies would be wise to ensure right now that they are in compliance with rules governing independent contractors.
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