‘Independent contractor’ abuse is scrutinized

There’s a flurry of activity in the nation’s capital to clamp down on U.S. workers that are misclassified as independent contractors, a category under which all but a tiny minority of real estate agents fall.

According to Realtor magazine, a publication of the National Association of Realtors (NAR), the government says far too many businesses are using incorrect employee classifications to avoid paying Social Security, Medicare and unemployment insurance taxes.

Congress last year started looking into misclassification of employment status in an attempt to get a handle on a problem that the U.S. Department of Labor says is huge – possibly applying to as much as 30 percent of the country’s workforce.

This year, the government’s focus intensified:

Some firms seem to treat brokers like employees

As independent contractors, good real estate brokers work hard. (Flickr photo by Christolakis.)

A New York Times front-page article on the IRS cracking down on companies that blur the line between independent contractors and employees caught my eye.  Some brokerage firms nudge that line all the time.