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Internal Revenue Service

Labor Department issues guidance on classifying workers

Labor Department issues guidance on classifying workers

On Wednesday, the Labor Department spelled out how to determine whether a worker is an employee or an independent contractor. The guidance comes as a growing number of employers are contracting out services to third parties, including subcontractors, temporary agencies and franchisees. Many of those companies, including Uber and Groupon, have been sued by workers who claim they've been "misclassified" as independent contractors when they are really employees. Worker advocates say companies misclassify employees to save costs by not paying payroll taxes, unemployment insurance, workers' compensation insurance and overtime. The guidance, which labor and employment...