The Department of Labor (DOL) has been very aggressive in auditing employers over the misclassification of workers as independent contractors, instead of employees.  Properly classifying workers is important for employers to avoid hefty fines, additional taxes, interest, and additional wage and overtime obligations.

The old test focused on the employer’s control over the worker. 

Last month, El Azteca, a Wisconsin business which owns four restaurants, reached a consent judgment in U.S. District Court to resolve a lawsuit filed by the U.S. Department of Labor. The U.S. Department of Labor’s Wage and Hour Division conducted an investigation and discovered numerous violations of the Fair Labor Standards Act.  The violations included:

US%20Department%20of%20Labor%20logoThe final overtime regulations on exempt employees were issued by the Department of Labor last week, raising the salary test from $23,660 annually to $47,476.  It is estimated this will result in an additional 4.2 million more employees qualifying for overtime.

The new salary threshold has sparked controversy and claims by both labor and management