Previously published in Holme Roberts & Owen LLP
January/February 2010 Employment Law Newsletter.
In 2010, employers can expect an unprecedented increase in
enforcement efforts targeting employees misclassified as Form 1099
independent contractors. Attention to this issue has been growing
in recent years. However, with state and federal budget deficits
now headlining the news, and cash-strapped governments aggressively
searching for unrealized tax revenue, the time is right for this
nagging issue to become a major headache for employers. The IRS
recently announced that in February 2010, it would begin a national
audit targeting up to 6,000 employers, with the goal of quantifying
the revenue shortfalls created by misclassification of employees.
Two-hundred auditors have already begun training to staff this new
program. Furthermore, the Department of Labor's Wage and Hour
Division and twenty-nine states have signed up to collaborate with
the IRS and share the results of
