2014 Employee Classification Law

A new law began January 1st addressing the classification of employees versus independent contractors in the construction industry.  As published in our state association journal; this law imposes substantial penalties, cease and desist orders, and debarment orders against employers found to have misclassified employees as independent contractors.  It also imposes individual liability onto corporate officers and agents that “knowingly permit such employer to misclassify its employees.” This does exempt groups that are “responsible bidders” from having to comply with these new requirements. Opponents have raised concerns that the measure is largely targeted at making it more difficult for non-union contractors to win contracts.

It is more important now than ever to properly determine who is an employee and who is truly an independent contractor.  Here is a link to the IRS determination page.