Don't Mess With Taxes

Gig work is the preferred employment life for millions. 

They enjoy being their own boss. There's the freedom to take as many or as few assignments as desired. You can do the jobs the way you want and during the hours you choose. There's no commuting.

Sometimes, however, clients try to control contractor workers a bit too much.

When that happens, the workers could in fact be employees, not contractors. They'd lose some of the freedom mentioned earlier, but as employees, they would be entitled to workplace benefits, including health care, paid time off, compensation for expenses, and a minimum wage.

Determining work role: The Department of Labor (DoL) has tests to determine whether a worker should be classified as an employee or contractor. So does the Internal Revenue Service.

The Biden Administration wants to tweak these considerations, and do away with some changes made by the prior Oval Office occupant.

The Trump Administration issued a rule that included an economic-reality test that primarily considers whether the worker operates his or her own business or is economically dependent on the hiring entity. The change made it easier for workers to be classified as independent contractors. It was to take effect in March 2021.

Then came November 2020. When President Joe Biden was elected, his administration did an about face. It tried to rescind the prior administration's contractor vs. employee rule, but a federal judge nixed that move.

So it issued its own contractor vs. employee proposal, published in the Federal Register on Oct. 13.

More employees instead of contractors: The Biden version would cover a wide range of workplaces, including healthcare, restaurants, construction, and ride-share. Essentially, it would turn more current gig workers into employees.

The move obviously upset companies. It would mean more work for them in assessing the status of those who do jobs. If contractors are determined under the rule change to be employees, it would cost them more money.

The change also freaked out many contractors who absolutely don't want to be officially working for the man or woman.

The good news for those opposed to the Biden proposal is that they get an opportunity to make their issues with the rule known. And even better, they now have more time to do just that.

New rule comment deadline: The Labor Department originally asked for all comments to be submitted by 11:59 p.m. Eastern Time on Nov. 28.

Now everyone, pro or con, has 15 more days to comment. The new deadline is Dec. 13.

The extension came after business groups and others complained the original deadline was too soon. It was of particular concern to trade groups, who said the turnaround time was insufficient for them to fully discuss it with all their members and get feedback on how the proposed change would affect their operations.

If you have a company that uses contractors, you don't have to rely on your industry's trade group to speak for you. You can submit your comments on the rule yourself.

So can contractors who are for or against it.

Just do so by Dec. 13.

Ch, ch, ch, changes: This weekend's Saturday Shout Outs are for all those interested in the rule and providing their 2 cents. Below are some articles that discuss the Biden proposal and extended comment period in more detail.

• The Department of Labor Notice of proposed rulemaking on Employee or Independent Contractor Classification Under the Fair Labor Standards Act in two forms, the PDF version of the Oct. 13 notice and an online document, which also has a link to the public comments submitted so far;
• DOL Extends Contractor Proposal Comment Period After Complaints from Bloomberg Law
• DOL Extends Comment Period on Independent Contractor Proposal from NAPA (National Association of Plan Advisers) Net News
• Biden Rule Add More Gig Workers to Company Payrolls from the Wall Street Journal:
• How a U.S. rule on independent contracting will affect workers, businesses from Yahoo News
• Biden Chips Away at Trump's Deregulatory Legacy With New Gig Worker Rule from Reason
• Labor Department moves to change independent contractor classification from Accounting Today
• DOL gets backlash on its new 'gig worker' rule, extends comment period from ALM Benefits Pro

Finalization not expected until next year: The added comment time will allow for more input. My check just before posting this showed the Biden Administration proposed contractor/employee change already has received 8,203 public comments.

Once the comment period ends, now on Dec. 13, the White House will go through them before issuing a final rule. That will be sometime in 2023.

I'll leave you to your commenting on the potential change.

And I, as an independent contractor in charge of how and when I do the work I choose, am going to call it a day.

You also might find these items of interest:

• 5 tax tips for freelancers, gig economy workers
• Texas BBQ joint employees finally get improperly distributed taxable tips
• Employee or contractor classifications and other employment tax tips for businesses

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