This week, legislative director for SHRM's Maryland State Council, Christine Walters, testified at a joint subcommittee hearing of the House Education and Labor Committee on the use of independent contractors in today's workforce. Walters explained how confusing it can be for HR professionals to know when to classify certain workers as "independent contractors." Her testimony can be viewed by clicking HERE.
"Employers may hire contingent workers for a variety of reasons including filling temporary absences, dealing with workload fluctuations, meeting employee requests for part-time work, and continuing to utilize the skills of an employee who has left employment," Walters said. "With the increased interest in these various working relationships, more employers are faced with making the sometimes complicated classification analysis."
The congressional hearing was held to examine whether some employers are abusing the "independent contractor" classification to reduce their costs, since these workers do not receive the same level of retirement, health care and workplace benefits as "employees." Witnesses said that employee misclassification is "rampant," implying that some employers intentionally label certain workers as "independent contractors" to save money on pay and benefits.
However, Walters testified that employer confusion is the largest cause of misclassifications of independent contractors. She explained that this lack of clarity is the result of multiple agency and statutory jurisdictions over the definition of both "employee" and "independent contractor." Walters suggested that "joint guidance from the various agencies on the classification of employees would greatly assist employers in complying with the law."
At the conclusion of the hearing, Representative Rob Andrews (D-NJ), Chairman of the House Health, Employment, Labor and Pensions Subcommittee, thanked Walters for her testimony on behalf of SHRM and noted, "Your association has been a valued advisor to this committee for a long time and we hope that continues to be the case."
You can count on it, Congressman!