Last weekend, I didn’t post because I was in D.C., where I had my first tour of the cherry blossoms. One of the most beloved trees at the Tidal Basin is this poor shrub of a tree affectionately known as Stumpy.

Stumpy looks dead, but every March he (he?) sprouts a cheery hat of blooming cherry blossoms. But this bloom will be Stumpy’s last. Because of repeated flooding around the Tidal Basin, the sea wall is being raised, which will require the chopping down of 150 trees.

While Stumpy is in for a rude surprise after the bloom, companies using independent contractors can plan in advance to avoid their own demise.

I was asked recently what are the most common ways that claims of independent contractor arise. I thought, that’s a good blog post topic. So here goes.

Here are the most common way that a claim of independent contractor misclassification can arise:

• Individual lawsuit
• Class action lawsuit
• Government audit, random – IRS, DOL, state DOLs, state tax agencies
• Government audit, based on complaint – IRS, DOL, state DOLs, state tax agencies
• Former IC files for unemployment. Employer denies IC was an employee, but the agency investigates and concludes the worker was misclassified. Typically, the agency will then assume all similarly situated ICs were also misclassified and the employer failed to pay into the unemployment system for the lookback period (probably 3-4 years) and will then issue a large bill for unpaid assessments, often six figures+.
• Workers’ compensation claim, same scenario as for unemployment

There are also unexpected and odd situations that can arise, like here.

A similar list for Stumpy might look like this:

Most likely ways that Stumpy might meet his demise:

• Chainsaw
• Axe
• Lightning strike
• George Washington’s chopping method of choice if he could tell a lie
• Typhoon

Ok, typhoon seems unlikely. I assume it’ll be a chainsaw.

© 2024 Todd Lebowitz, posted on WhoIsMyEmployee.com, Exploring Issues of Independent Contractor Misclassification and Joint Employment. All rights reserved.