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BLOG: Legal and Financial Risks for IT Staffing Firms to Misclassify Their Employees

July 27, 2021 - TechServe Alliance | IT & Engineering Staffing Resources

The risk of misclassifying employees as independent contractors (IC) is a growing problem for companies nationwide. While most states have laws that regulate worker classification, the U.S. Congress is considering passing a federal law that would override existing state laws. In February, the U.S. House of Representatives passed the Protecting the Right to Organize (PRO) Act, which legal experts say is parallel to California’s rigid IC law known as AB5. The federal bill needs to pass the Senate and be signed by President Joe Biden before it can go into effect.

Chris Leddy, a corporate partner with Becker LLC, says IT staffing firms that misclassify employees as ICs take on a substantial legal and financial risk under current state and federal laws.

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