Employee Wage and Hour Violations on the rise.
The IRS and the Department of Labor have teamed up in a new bill named the Taxpayer Responsibility, Accountability, and Consistency Act of 2009 (H.R. 3408). This bill allows for "independent contractors" to petition the Internal Revenue Service (IRS) for a determination of whether they are properly classified as independent contractors or if they should be deemed an employee. The bill proposes to significantly increase employer penalties in the event of misclassification, and make it more difficult for employers to avoid employment tax liability for such misclassification.
Below are just a few ways employers and small business owners can prevent violations of misclassification of employees:
1. Check overtime exemptions. Never assume an employee is exempt from overtime payment simply because they are paid a salary.
2. Check overtime pay calculations.
3. Check that all hours worked, are hours paid.
4. Beware of improper wage deductions.
5. Double-check your employee's classification to determine if they are independent contractors or employees.
6. Check your record-keeping. Make sure you are keeping the right records to prove you are in compliance because the burden will ultimately rest on you, the employer.
7. Never assume that because an employee is not "in status" with immigration law, that they are not owed minimum wage or overtime pay. Huge penalties can be issued by not having your 1-9s in compliance and by the Department of Labor for unpaid wages and/or overtime.