By Larry L. Turner and Joy F. Grese, Morgan Lewis & Bockius, LLP 

Many employers use independent contractors to remain competitive within the marketplace. When used correctly, independent contractors can supplement an employer's regular workforce and provide costs savings, staffing flexibility and efficiency, and reduce potential liability under federal and state law. Unfortunately, some employers fail to appreciate the attendant risks of wrongly classifying regular employees as independent contractors, an under-appreciation that could prove costly.

The misclassification of workers has become the focus of intense scrutiny by the federal and state regulatory and legislative arms of government, as well as by an active plaintiffs' bar. It has never been more important for employers to get it right when it comes to creating and maintaining legitimate independent contractor relationships. This article examines how the interest in this issue has increased, risks under the current law, and a few best practices to foster an independent contractor relationship.

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