Tech companies eye proposals on use of independent contractors

[Newsjock]

Source: San Jose Mercury News

Tech companies are nervously eyeing proposals in Washington to beef up enforcement and increase fines for violations of a complicated set of rules covering the use of independent contractors.

... Many valley workers prefer the flexibility and control over their work offered by being an independent contractor, but it can also be a way for employers to avoid collecting payroll taxes and other costs associated with having an employee. Contractors don't have the protection of equal opportunity laws, coverage under occupational safety and health regulations or the right to organize.

Sen. John Kerry, D-Mass, and Rep. Jim McDermott, a Seattle Democrat, are sponsoring legislation to give the IRS more power to go after employers and increase fines tenfold, in some cases up to $1 million. The Obama administration is also allocating $25 million in its 2011 budget for training 100 auditors to catch violators.

... In one famous case a decade ago, Microsoft was sued by freelancers for stock options granted to employees. The settlement cost the Redmond software giant a reported $96 million along with penalties for not classifying the workers as employees.

Read more: http://www.mercurynews.com/breaking-news/ci_14499797

[FreakinDJ]

1. Why increase Tax Audits - Enforce the labor laws

and close the loop holes for "Independent Contractors"

[OhioChick]

2. K&R n/t