Handling the Non-Employee – Freelance Workforce

Handling the Non-Employee – Freelance Workforce

Handling the Non-Employee – Free of charge Lance Workforce

Schwartz Heslin Group, Inc.

by Frederic J. Buse, Handling Director

Starting in 1985, the New York Point out Dept. of Labor started issuing occupation- distinct recommendations to make clear who need to be categorised an personnel and who is an independent contractor.

From 1985 to 2005, recommendations masking ten industries were being issued but and none considering that.


Chart one
Existing NYS Dept. of Labor Recommendations Cover the Pursuing ten Occupations:

Type Range:   Description

IA318.11:           Agricultural Work

IA318.sixteen:           Organized Camps

IA318.seventeen:           Executing Artists

IA318.18:           Insurance Income Industry

IA318.19:           Newspaper and Buying Guide Publishers

IA318.20:           Translating and Deciphering Industry

IA318.21:           Tour Guide Industry

IA318.22:           Van Operators In The Moving Industry

IA318.23:           Magazine Publishing Industry

IA318.24:           Messenger Courier Industry

Source: (See http://www.labor.condition.ny.us/formsdocs/ui/formsandpublications.shtm ).

By  contrast,  California’s  Employment  Development  Department  has  issued  “Information   Sheets”  covering  22  occupations  or  industry  segments.  
(See http://www.edd.ca.gov/Payroll_Taxes/Sorts_and_Publications.htm)

It is tough to determine what constitutes employment to set up employer legal responsibility for UI taxes and claimant coverage for unemployment insurance policies reasons. With the exception   of   specified   distinct   exclusions   and   inclusions,   the   term   “personnel”   is   not   defined and there is no statutory basis for distinguishing in between and personnel and an independent contractor.

In most situations, this situation is elevated when a employee applies for unemployment rewards. The past employer is contacted by the Dept. of Labor and questioned for the instances of career decline. If the employer indicates that the employee was an independent contractor and not an personnel, details about the details and instances of the  claimant’s  work  status  will  be  requested  by  the  Liability  &  Determination  Section  of   the   Dept.   of   Labor   (“L&D”)   — generally from equally the claimant and the employer. Right after completing its fact finding, L&D will situation a perseverance letter. If they find that the claimant was an personnel, the Labor Dept. will notify the business which processed the claim that the claimant is qualified for UI rewards. L&D also will mail a perseverance letter to the employer citing the things which led to the choice about employment, instructing the employer to file amended UI tax returns to include the taxable wages of the claimant and all other equally located folks. The employer has thirty times to charm the choice to an Administrative Legislation Decide. The next level of charm is the UI Charm Board.

If the employer fails to react with revised tax returns and does not charm the choice, he need to expect a take a look at from a Dept. of Labor auditor. The auditor will evaluation payroll details concerning the applicant for unemployment insurance policies and all other workers with identical operate responsibilities. Approximately ten,000 these audits are finished annually. As a end result of these an audit, requests/requires for additional UI tax payments plus penalties of $50,000 or far more are not strange.

The NYS Dept. of Labor adjudicates many far more personnel vs. independent contractor cases than any other condition agency. It is progressively distinct that it has targeted appreciable audit resources to indentify employers who misclassify staff as independent contractors. At the request of the Labor Commissioner, the Governor on September nine. 2007 issued Executive Order No. seventeen, establishing a Joint Enforcement Activity Power on Employee Misclassification.

(See http://www.ny.gov/governor/push/0907071.html).

The Activity Power was directed to strengthen enforcement, steer clear of duplication by sharing relevant details amongst many condition agencies, and coordinate equally investigation and enforcement steps.

The NYS Dept. of Labor has two sections which evaluation selections of the Administrative Legislation Decide, the UI Charm Board and finally the 3rd Office Appellate Division of the Supreme Court (the appellate courtroom to which all disagreements with the rulings of UI Charm Board have to be introduced.) Both of those keep indexes of precedent cases to help the local offices in their determinations.

– the  Adjudication  Services  Office  (“ASO”)  focuses  on  decisions  related  to  a   claimant’s  eligibility  for  UI  benefits.

– the Liability & Willpower Section concentrates on employer difficulties.

Summaries of past selections by the UI Charm Board and the Courts relating to claimants are readily available on the internet. The summaries are indexed by topic and include precise descriptions of the true selections.

Chart two
On line Claimant Eligibility Subject areas Included by ASO

Index #               Subject

  • seven hundred:      Availability and Capability
  • 800:      Registration, Reporting and Certification 
  • 900:      Determination of Benefits
  • 1000:    Hearings and Appeals
  • 1100:    Misconduct
  • 1200:    Refusal of Work
  • 1300:    Industrial Controversy
  • 1400:    Total or Partial Unemployment
  • 1500:    Misrepresentation and Redeterminations 
  • 1600:    Voluntary Separation
  • 2000:    Section 599 (shared operate plan) 

Source: http://www.labor.condition.ny.us/ui/aso/interpservice.shtm

Summaries of past selections by the UI Charm Board and the Courts relating to employers are not on the internet and are only readily available in paper variety in Albany. The thorough summaries are indexed by occupation and mentioned by statutory inclusions and statutory exclusions which are additional damaged down by all employers, non-profits and govt employers.

Examples of the summaries (the total checklist is a lot more time) similar to occupations precisely protected by statute include:  

Index #      Occupation

  • 3150          Statutory inclusions
  • 3150A             Agent-driver or commission driver
  • 3150B             Professional musician
  • 3150C             Traveling salesman
  • 3150D             Professional design  
  • 3200          Statutory exclusions (all employers)
  • 3200A             Spouse or slight baby
  • 3200B             Employment issue to federal railroad U.I. Act
  • 3200C             Student  and  student’s  spouse
  • 3200D             Licensed real estate brokers  
  • 3250          Statutory exclusions (non-profits & govt)
  • 3250A             Golf caddy
  • 3250C             Baby sitter  
  • 3300          Statutory exclusions (non-revenue employers)
  • 3300A              Minister
  • 3300D              Rehab solutions or operate at rehab facility  
  • 3350          Statutory exclusions (governmental employers)
  • 3350A              Elected officials
  • 3350B              Member of legislature or judiciary
  • 3350C              State National Guard
  • 3350D              Inmates of penal establishments  

Examples of the summaries of selections similar to occupations not protected precisely by statute include:

Index #               Occupation 

  • 3800 .005    Accountant/tax preparer
  • 3800 .001    Artist
  • 3800 .025    Attorney/Paralegal
  • 3800 .005    Professional design
  • 3800 .035    Bookkeeper
  • 3800 .045    Cleaner/Maintenance Worker/Janitor
  • 3800 .05      Coach
  • 3800 .06      Construction worker 
  • 3800 .065    Consultant
  • 3800 .07      Delivery man or woman
  • 3800 .080A  Limousine driver
  • 3800 .085    Editor/Proofreader
  • 3800 .09      Engineer/Draftsman
  • 3800 .120B  Nurse
  • 3800 .120D  Physician
  • 3800 .013     Interviewer/Investigate Interviewer
  • 3800 .075     Officer/Director/Board Member
  • 3800 .215G  Securities Salespersons
  • 3800 .22       Secretary/Stenographer/Typist 
  • 3800 .2255   Teacher/Tutor
  • 3800 .23       Telephone solicitor/Telemarketer
  • 3800 .24      Waiter/Waitress/Services Staff
  • 3800 .245    Writer/Editor  

There are a significant amount of summarized employer cases indexed by L&D. For case in point, precedent cases involving clinical occupations (#3800.120A to #3800.120G) amount far more than eighty.

If you acquire a perseverance letter from the Liability and Willpower Section, you need to request a assembly with them. Prior to the assembly, you are effectively recommended to obtain the circumstance summaries masking the occupation(s) in dispute. You need to also evaluation other occupations in the similar field. Right after reviewing the summaries, you can request copies of the distinct UI Charm Board and NYS Supreme Court selections determined in every summary relevant to your difficulties.

  If, after exchanging correspondence or assembly with L&D, you are not contented with the Dept. of Labor summary, on behalf of your consumer you can request an informal listening to with L&D. If you however dispute the L&D conclusions, you can request a formal listening to ahead of an Administrative Legislation Decide.

The formal listening to request have to be received on a timely basis. These listening to are usually  conducted  in  Albany  by  ALJ’s  with  experience  in  employer  liability  issues.     Keep in mind, you have to set up a finish record at an ALJ listening to. Normally, no new details will be approved at the next level if you make your mind up to charm an ALJ choice to the UI Charm Board. Likewise, the 3rd Office of the NYS Supreme Court, Appellate Division relies on the record proven ahead of the ALJ. The normal adopted by  the  court  is  whether  or  not  there  is  “sizeable  evidence”  to  support  the   Charm  Board’s  decision.

One particular ultimate note – not-for-revenue businesses categorised 501 C (three) by the Inner Revenue Services  may  request  to  become  “reimbursable”  employers  and  avoid equally U.I. taxes and most U. I. audits in exchange for agreeing to reimburse any UI rewards paid to previous workers.

SHG can help employers faced with independent deal concerns to lower the influence on their UI taxes and penalties.


Make contact with: Handling Director Fred Buse — fbuse@shggroup.com

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