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Navigating
the global and digital realities of the 21st Century business landscape
is a challenge for any organization, but particularly those in the
business of educational content who must understand the nuances
of the education, business, and publishing worlds. Now, companies
in the education space can turn to Dorsey & Whitney’s
Legal Corner, an industry partnership between AEP and global law
firm Dorsey & Whitney.
Legal Corner
is a series of articles and podcasts by D&W
partners providing guidance on operational concerns like data security
policy, industry-specific challenges like international rights licensing
and intellectual property, and other business objectives involving
mergers & acquisitions,
equity and debt financings, and more.
Latest
Blog Post
Independent Contractor or Employee:
Getting It Right Is More Important Now Than Ever Before
by Gary M. Gansle, partner in Dorsey
& Whitney's Labor and Employment practice
For far too long, employers have taken a laissez-faire approach
to classifying workers as independent contractors in order to
help control costs, streamline their organizations, and honor
the stated preferences of their workers. However, the cost associated
with being undisciplined and incorrect about these classification
decisions can be quite expensive, and is likely to get more expensive
in the near future given the Department of Labor's "Misclassification
Initiative," which is designed to identify and reduce employee
misclassification. In fact, the Department of Labor has requested
a specific $25 million line item in its 2011 budget to hire additional
investigators and enforcement personnel, as well as to create
competitive grants to encourage state agencies to focus more attention
on this issue. This should come as no surprise in these lean tax-revenue
years given that the General Accounting Office recently estimated
a loss of more than $2.7 billion per year in unpaid Social Security,
unemployment and income tax as a result of this type of misclassification.
Misclassification of employees as independent contractors can
result in substantial liability and penalties for, among other
things, back taxes, overtime pay, workers compensation, employee
health benefits, and retirement benefits
Read
on.
For more information about Dorsey & Whitney's Legal Corner
or to submit a question for consideration, contact Stacey
Pusey.