Beginning March 11th, 2024, the Department of Labor will begin using a new set of guidelines to determine whether a worker is classified as an employee or a sub-contractor.

While Gold Standard has always urged clients to properly classify their workers, this is something that many businesses sidestep simply because it is "easier" for the business owner. But doing this can lead to steep fees and fines, which, in the end, is certainly a much harder route for business owners.

Review these guidelines to see if you are compliant and properly classify your workers.

1. Opportunity for profit or loss depending on managerial skill

A worker can accept or decline jobs, engages in marketing and advertising their skill or service, and determines pay for work provided.

2. Investments by the worker and the employer

A worker should have evidence that they are making investments in their own business to suggest that they are operating independently.

3. Degree of permanence of the work relationship

If the work relationship is definite, continuous, and exclusive, this is in favor of the worker being and employee.

4. Nature and degree of control

The worker sets their own schedule. The employer would not impose comprehensive training requirements beyond training required for relevant licenses.

5. Extent to which the work performed is an integral part of the employer’s business

If the function the worker performs is an integral part of the business, it would factor in to an employee.

6. Skill and initiative

The worker would not be dependent on training from the employer. The use of specialized skills in connection with business-like initiative would indicate they are an independent contractor.

Is it time to change some sub-contractors to full-fledged employees? Click here to schedule an appointment with one of Gold Standard's seasoned payroll processors.

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