Go Back to Labor + Employment

Practice

Independent Contractor Misclassification + Compliance

Troutman Pepper Locke’s Independent Contractor Misclassification and Compliance team helps companies avoid, minimize and defeat litigation challenges to the use of independent contractors and other contingent workers. Our interdisciplinary team is composed of more than labor and employment, employee benefits, tax, and class and collective action lawyers. We have long been dedicated not only to advising businesses how to enhance compliance with federal and state independent contractor laws but also to defend companies facing misclassification audits and proceedings by state workforce agencies and the IRS as well as an ever-increasing number of class and collective actions.

Our lawyers have represented companies of all sizes in independent contractor compliance and misclassification matters in dozens of industries in almost every state, including the companies engaged in the on-demand gig economy, which have made increasing use of workers paid on a Form 1099 basis.

A National Reputation

Our firm has earned a national reputation for our work in this area of the law. Team members have published dozens of articles, presented at dozens of seminars and webinars, and have been over 120 times in national and local print and online media on the subject since 2010.

Through years of experience, our lawyers have developed an approach to independent contractor compliance focused on crafting customized and sustainable solutions to help organizations continue to utilize independent contractors and at the same time minimize the likelihood of misclassification liability.

Our team members created a state-of-the-art process and methods that allow us to restructure, re-document and re-implement independent contractor relationships without altering a company’s business model or strategies. We generally avoid the use of one-size-fits-all agreements that tend generally to be ill-fitting for most companies.

The tests for independent contractor status vary widely from state to state and at the federal level, and currently are in flux. Laws in some states require creative means to elevate compliance, including ways to counteract new approaches used by class action lawyers to challenge independent contractor business models, such as the joint employer doctrine.

Part of our client service in this area of the law involves the drafting of arbitration provisions with class and collective action waivers. This focus is intended to minimize legal costs for businesses that may be targeted by one or more workers wishing to serve as class action representatives in a legal challenge. We also offer management training to clients so that they can better implement the solutions they adopt to minimize misclassification liability.

Members of our team publish the only legal blog in the U.S. dedicated to publishing original content on the subject of independent contractor misclassification and compliance. This blog, part of the firm’s suite of legal blogs, was launched in 2010. It is noted for its comprehensive treatment of key legal developments and includes a monthly update of court decisions, administrative initiatives, and legislative developments in this important niche area of the law. Our blog has been recognized as the go-to source for C-suite executives and legal professionals seeking up-to-date information, analyses and practical suggestions for businesses utilizing independent contractors in a way that maximizes compliance with independent contractor laws.

Many of our independent contractor compliance team members are litigators deeply experienced in defending organizations, both large and small, facing independent contractor misclassification claims brought in judicial or administrative proceedings, audits by governmental agencies including the IRS, and private class and collective actions in court.

Plaintiffs asserting these claims invoke an array of federal and state laws covering overtime and minimum wage, expense reimbursement, employee benefits, criminal background checks, and wage payment and wage notice laws. Our approach to defending misclassification cases is to deploy many of the same tools we use to enhance compliance, reformulated to maximize success in the litigation arena.

Independent contractor misclassification cases oftentimes arise in the context of claims for unemployment compensation and workers’ compensation benefits. State workforce agencies have been extremely aggressive in seeking to turn a single claim for benefits into audits or mini-class actions where decisions as to one claimant can be applied to all similarly situated workers. For this reason alone, many of our clients ask us to vigorously defend these claims, and we have done so effectively before workforce agencies around the country.

Independent Contractor Misclassification + Compliance Blog

The only blog in the country devoted to publishing original content on independent contractor misclassification and compliance issues, our blog is a go-to resource for businesses and legal counsel seeking up-to-date and comprehensive coverage.

Resources

Hiring to Firing
Law Blog

Hiring to Firing
Podcast

Representative Engagements
ICC

Industries Represented
ICC

Our highest goal? Achieving yours.

Exceptional results are our best practice

Find your professional