Preserve entrepreneurial spirit and protect independent contractors

From Central Maine —

Small business owners, including myself, take the risk of starting a company because we believe in the American dream. In recent years, however, the Department of Labor has taken aim at these entrepreneurial Americans by enacting regulations that would reclassifying independent contractors as employees, affecting most small business owners, from accountants and engineers to consultants and contractors…

In recent years, the Department of Labor has used audit-type surveys to reclassify independent contractors as employees. These classifications, however, often are at odds with the Internal Revenue Service’s classification tests. Add to this patchwork of regulations the fact that each state also has slightly different tests to classify employees.

This uncertainty can have a chilling effect on small business owners who fear that hiring contractors will mean complicated paperwork that varies from agency to agency and state to state. If they do hire independent contractors, they run the risk of a federal audit. The onus is particularly heavy on start-ups and smaller businesses that don’t have the assets to hire full-time workers.

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