President Barack Obama (file photo)

BY DERON AKIONA – Independent contractors in Hawaii don’t draw a salary from a single company, but work on contract or through an alternative arrangement providing services, often to a larger enterprise.

President Barack Obama’s budget, released in February, includes $14 million to combat so-called employee misclassification, enabling the U.S. Department of Labor to coordinate with the IRS and participating states to reclassify employees.

This assault by state and federal agencies is forcing companies to reclassify their independent contractors as rank-and-file employees. This action has harmful consequences to the economy and could lead to millions of lost jobs and disruption to vital services.

Independent contractors are a vital and experienced part of the workforce in many sectors of the economy, including financial services and emergency medicine.

In 2010, independent contractors accounted for $626 billion in personal income – that’s one in eight dollars earned in the United States. What’s more, economists predict that independent contractors will make up at least 50% of the workforce by 2020.

The right of independent contractors to work for themselves and make their own professional decisions should not be placed in jeopardy by our elected officials.

Forcing companies to reclassify individuals as employees is bad for business and bad for the men and women who have chosen to work for themselves and support their families in this way. Independent Contractor help Hawaii’s economy to continue growth in the most difficult times.

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  1. Many of US can tell you honestly that it is easy to be classified as an Independent Contractor. No one can stop you. Set up a LLC and get busy. Indeed being your own person as an IC is a good think. Until you have an economic dependency from one company or source. Without an iron clad contract you will be crushed economically and emotionally in possibly one year for such things as being fired for getting pregnant; Pooneh Hendi Glascock v. Linn County Medicine, Emergency PC. Promised interest in the business, she was fired and sued. Federal Court in Iowa granted Summary Judgment in favor of the defendant. She appealed and the 8th Circuit affirmed the N.D. of Iowa.

  2. . Others take a job with a company that withholds no taxes yet are promised much, but then told the more time and money the worker invests, the more money they make. Five years after starting work, the workers discuss a policy/regulation book that outlines all job duties, but says nothing about classification. When the finished book is sent, no one notices Independent Contractor hidden in one paragraph with no definition. For a number of years they loyally and faithfully work some seventy hours a week and then suddenly in a top year of sales they are terminated for no reason and deemed to be an Independent Contractor. As the worker, you cannot gain back your youth. You have no business set up to suddenly find a different “account” as an Independent Contractor would. And the worst thing is that you won’t get a Jury Trial of your peers. Fesler v Whelen.

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