Worker Classification 101: What Business Owners Need to Know

Paychex THRIVE, a Business Podcast

This week on Paychex THRIVE, class is in session with Shefali Milczarek-Desai, a distinguished scholar and associate professor of law at the University of Arizona. She joins Gene to explore the complex subject of worker classifications as understanding its intricacies is more than a compliance exercise — it's an operational necessity. Shefali provides insights into recent changes in worker classification regulations, particularly focusing on new rules surrounding independent contractors, bringing attention to their impact on wages, benefits, and protections. This episode also explores the legal and financial implications of misclassification, along with strategies to avoid it. This is one class you don’t want to skip.

Topics include:

00:00: Episode preview and welcome

01:22: Introduction of Professor Shefali Milczarek-Desai

05:24: Introduction of worker classification discussion and rule changes

06:57: Explanation of the Fair Labor Standards Act and its implementation

10:52: Navigating the six factors for determining worker classification at the federal and state levels

15:02: Defining independent contractors vs. employees

17:03: Reviewing the Economic Realities Test

20:27: Department of Labor and IRS role in worker classification

22:15: Advice for business owners on navigating worker classification rules

26:25: Consequences of misclassification

28:41: Wrap up and thank you

DISCLAIMER:
The information presented in this podcast, and that is further provided by the presenter, should not be considered legal or accounting advice, and should not substitute for legal, accounting, or other professional advice in which the facts and circumstances may warrant. We encourage you to consult legal counsel as it pertains to your own unique situation(s) and/or with any specific legal questions you may have.