The Interim Study on Employment and Labor was charged this year to study the topic of worker misclassification. The complaint is that individuals working as independent contractors and receiving a 1099 IRS form should be classified as employees. Some claim that bad actor employers (particularly in the construction field) purposely misclassify workers to keep their overall payroll taxes lower. As a result, these employers are able to undercut bids for projects against those who classify workers properly.That puts those businesses that properly classify at a disadvantage.

Most of the complaints have come from union organizations and contractors. A spirited debate arose when the Associated Builders and Contractors of Indiana testified that there really isn’t a problem. Does it happen? Yes, but it isn’t widespread as has been presented. The group indicated that unions are unable to track, find and organize independent contractors. The Department of Workforce Development testified that it has been auditing employers through its wage investigation unit, with more than 1,400 audits having been performed in 2019.

Resource: Mike Ripley at (317) 264-6883 or email: [email protected]