The Misclassification of Independent Contractors: The Fifty-Four Billion Dollar Problem 12 Rutgers Journal of Law and Public Policy 2014-2015

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12 Rutgers J. L. & Pub. Pol'y 138 (2014-2015)
The Misclassification of Independent Contractors: The Fifty-Four Billion Dollar Problem

handle is hein.journals/rutjulp12 and id is 153 raw text is:

Rutgers Journal of Law & Public Policy

THE MISCLASSIFICATION OF INDEPENDENT
CONTRACTORS: THE FIFTY-FOUR BILLION
DOLLAR PROBLEM

David Bauer*

I. INTRODUCTION

Employers' are required to categorize their workers as either
employees2 or independent contractors.3 On average, most
independent contractors are properly classified, but the problem is
that many employers misclassify their workers in order to save on
labor costs and avoid liability under various employment Acts.4 A

* LL.M. (in taxation) 2013, New York University School of Law; J.D. magna
cum laude 2012, St. Thomas University School of Law; B.S. 2oo9, Florida
International University.

1 BLACK's LAW DICTIONARY 604 (9th ed. 2009). An employer is defined as [a]
person who controls and directs a worker under an express or implied contract of
hire and who pays the worker's salary or wages. Id.

2 Id. at 602. An employee is defined as [a] person who works in the service of
another person (the employer) under an express or implied contract of hire, under
which the employer has the right to control the details of work performance. Id.

3 Id. at 839. Independent contractor is defined as:

One who is entrusted to undertake a specific project but who is
left free to do the assigned work and to choose the method for
accomplishing it. It does not matter whether the work is done
for pay or gratuitously. Unlike an employee, an independent
contractor who commits a wrong while carrying out the work
does not create liability for the one who did the hiring.
Id.

4 See Obama Targets Employers that Misclassify Workers as Independent
Contractors, COMPENSATION.BLR.COM (Feb. 2, 2010), http://compensation.blr.
com/Compensation-news/Compensation/Independent-Contractors/Obama-

t138

Spring 2015

Vol 12:2