Worker classification is an area of major concern for employers
of all sizes. Misclassification of workers as independent
contractors has labor and employment ramifications as well as
employee benefits ramifications. Guidance from the Internal Revenue
Service (IRS) and the Department of Labor highlight that worker
classification issues are being closely scrutinized.
This article focuses on the impact of misclassification risks on
employer qualified retirement plans and health and welfare
plans. These misclassification issues are in addition to
other employment and tax issues that arise, including, but not
limited to, back pay (e.g., minimum wage and overtime
pay), failure to withhold and underpayment of Federal and
state/local income and employment taxes, and failure to provide
proper wage statements, such as Forms W-2.
