Do you understand where this is going? Two

Between 1997 and 2009 I had one client audited by the Department of Labor for Wage and Hour compliance. In the last 90 days I’ve had two.

The first had an auditor who brought along a trainee. The second brought along three trainees. When asked “How can you train three people at one time?” she shared that everyone in her office was being asked to train as many auditors as possible, as quickly as possible. She complained that the DOL was hiring auditors so fast they had no place to put them.

There are 25.8 million small businesses in the United States. Seventeen million of those have no employees. President Obama has stated that the mechanism of independent contractors is being abused, and keeping people out of the new health care system who should be covered. He has ordered the IRS (and apparently the DOL) to move aggressively in disqualifying people from Independent Contractor status and get them on payrolls where they belong.

That is why the health care reform bill includes a provision requiring that, effective 1/1/12, businesses create 1099’s for anyone they spend over $600 a year with. No longer will there be an exception for corporations. Aside from the massive paper pile that will be created by expanding the number of 1099’s by some huge factor (10x? 20x?) overnight, the IRS will have new data to mine regarding those home based businesses, cash businesses, and independent one-person service businesses who can be reclassified as part time employees for a number of employers.

And yes, part time employees count towards all your health insurance minimums and requirements.

Of course, this is being done in the name of stopping evil employers from “getting away” with “abusing” independent contractors. Free choice, and the fact that every contractor I know chooses to work that way, have nothing to do with it.

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