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Independent Contractor Classification: Regulatory Updates; Drafting Agreements to Mitigate Client Risk

Recently Revised NLRB and DOL Standards, Differing Federal Definitions, Stringent State Laws

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, July 17, 2024

Recorded event now available

or call 1-800-926-7926

This CLE course will prepare employment counsel to structure independent contractor agreements that help minimize exposure to misclassification claims. The panel will unravel the complicated legal framework with differing and overlapping federal law definitions for independent contractors versus employees. The panel will also discuss litigation updates and developments in federal, state, and local laws impacting the drafting of independent contractor agreements, and offer counsel best practices for drafting agreements to mitigate risk.

Description

The classification of workers as independent contractors rather than employees continues to be under intense government scrutiny at the federal and state/local levels. The U.S. Department of Labor (DOL) and National Labor Relations Board (NLRB) recently reestablished more stringent federal standards for determining whether a worker may be classified as an independent contractor, making it more difficult for businesses to use this designation without increased risk of agency enforcement actions.

States and localities are also stepping up efforts to protect independent contractors. Several states such as California, Massachusetts, Illinois, New Jersey, and Maryland have their own strict laws in addition to federal standards. Additionally, New York State recently enacted the Freelance Isn't Free Act, effective May 20, 2024, that mirrors New York City's law and requires all contracts with freelance workers worth $800 or more to be in writing or suffer costly penalties.

Misclassification errors can expose employers to significant liability under state and federal tax and employment laws. Therefore, counsel must understand when to designate workers as independent contractors and how to draft agreements to best protect their clients.

Listen as our panel discusses effective independent contractor agreement drafting techniques to mitigate the risk of misclassification and possible penalties. The panel will discuss how to tailor the agreement to the specific situation; analyze differing IRS, DOL, and EEOC definitions and noteworthy federal and state regulations; and outline key provisions to be included in the agreement.

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Outline

  1. Legal framework and recent regulatory developments
    1. IRS
    2. DOL
    3. EEOC
    4. NLRB
    5. State/local law considerations
      1. New York State's Freelance Isn't Free Act
  2. Independent contractor agreements
    1. Inherent limitations
    2. Key provisions to include
    3. Provisions to avoid
    4. Optional provisions
  3. Practitioner takeaways

Benefits

The panel will review these and other key issues:

  • What are the differences in the key definitions pursuant to IRS, DOL, and EEOC guidelines that must be incorporated into an independent contractor agreement?
  • What federal and state/local regulations should counsel consider before drafting an agreement?
  • What provisions should employment counsel be sure to include in an independent contractor agreement?
  • What provisions in agreements have been shown to contradict proving independent contractor status?

Faculty

Ho, John
John S. Ho

Co-Chair, OSHA-Workplace Safety Practice
Cozen O'Connor

Mr. Ho exclusively represents employers on all labor and employment matters and regularly handles wage and hour matters...  |  Read More

Langhammer, C. Edward
C. Edward Langhammer, Jr.

Member
Cozen O'Connor

Mr. Langhammer has over 35 years’ experience representing clients in all aspects of employment law and related...  |  Read More

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