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Employee vs. Independent Contractor: Classification Rules Every SMB Should Know
Compliance, Classification, 1099 vs W-2 Alex Santos Compliance, Classification, 1099 vs W-2 Alex Santos

Employee vs. Independent Contractor: Classification Rules Every SMB Should Know

The difference between an employee (W-2) and an independent contractor (1099) is determined by the substance of the working relationship, not the label on the paperwork. Federal agencies (IRS, DOL) and state agencies each apply their own multi-factor tests, and a worker can legally be a contractor under one and an employee under another. The most consequential question across nearly every test is whether the worker is economically dependent on your business or genuinely running their own. Getting the classification wrong is the single most expensive HR mistake an SMB can make — penalties stack across federal taxes, state taxes, unpaid overtime with liquidated damages, workers' comp, unemployment insurance, and benefits.

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Bye bye noncompete clauses
Compliance, Management Alex Santos Compliance, Management Alex Santos

Bye bye noncompete clauses

The U.S. Federal Trade Commission (FTC) has approved a proposed final rule banning most new noncompete clauses in employment contracts. This sweeping rule affects millions of workers and makes all existing noncompete agreements (except those covering senior executives) unenforceable.

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DOL Narrows Scope of Independent Contractor Classification: A Looming Tsunami for Businesses?
Compliance, Management Alex Santos Compliance, Management Alex Santos

DOL Narrows Scope of Independent Contractor Classification: A Looming Tsunami for Businesses?

The recent U.S. Department of Labor (DOL) rule that significantly narrows the definition of an independent contractor has sent shockwaves through the business community. This shift, set to take effect on March 11, 2024, resurrects a stricter "totality of the circumstances" test, potentially triggering a wave of misclassification lawsuits and hindering businesses' ability to engage flexible workers. Buckle up, folks, because we're in for a bumpy ride.

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2023 Expanded Joint Employer Rule: What Employers Need to Know
Compliance Alex Santos Compliance Alex Santos

2023 Expanded Joint Employer Rule: What Employers Need to Know

On October 26, 2023, the National Labor Relations Board (NLRB) issued a final rule that expanded the definition of joint employer under the National Labor Relations Act (NLRA). This means that two or more employers may now be considered joint employers of the same employees, even if they do not have direct control over the employees' terms and conditions of employment.

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