Averett Warmus Durkee (AWD) – accountants specializing in the timeshare resort industry in addition to other businesses – are warning that the U.S. Department of Labor has processed an increased number of enforcement actions against employers who misclassify workers.
“The Department of Labor’s Wage and Hour Division (WHD) is looking specifically at whether a worker is economically dependent on the employer or actually owns and operates their own business,” says AWD Partner Tom Durkee, CPA. “Resort companies relying on the services of independent contracts need to be aware of the six factors being used to make a determination.”
While some courts may consider other factors, the six basic ones are:
- Is the Work an Integral Part of the Employer’s Business?
- Does the Worker’s Managerial Skill Affect His or Her Opportunity for Profit or Loss?
- How Does the Worker’s Relative Investment Compare to the Employer’s Investment?
- Does the Work Performed Require Special Skill and Initiative?
- Is the Relationship between the Worker and the Employer Permanent or Indefinite?
- What is the Nature and Degree of the Employer’s Control?
“Employers need to be aware that just having workers sign an agreement stating they are independent contractors and issuing a Form 1099-MISC is not sufficient proof of their status,” adds AWD Partner Lena Combs. “It’s not just a matter of giving a worker’s position a label. We sent more information in a recent newsletter [available at http://www.bizactions.com/showopp.cfm/spid/2951/art/2667/ind/US]. If any of these points set off an alarm bell, you may wish to consult a legal professional.”
About Averett Warmus Durkee, CPAs
Averett Warmus Durkee (AWD) provides clients with assurance, accounting, and tax compliance services. As the largest independent CPA firm in Central Florida, AWD also provides consulting services to clients for business acquisitions and dispositions and advises clients on ways to improve their internal processes while providing them with relevant information needed to make timely, critical decisions. For further information about AWD, contact Tom Durkee (firstname.lastname@example.org) or Lena Combs (email@example.com) at (407) 849-1569 or visit www.awd-cpa.com.