Many local and national courier companies rely on the independent contractor model to successfully operate their business. In recent years abundant attention has been focused on the use of independent contractors by several different groups, among those groups is the Internal Revenue Service (IRS) as well as other federal and state labor agencies. These groups are looking closely at how companies are classifying their workers in an attempt to be sure the company is not avoiding taxation and other employee-related expenses. Class action lawyers have also joined in the advance by suing companies in the transportation industry as well as other industries.

Because of the recent spotlight and focus on the independent contractor model, companies are becoming frequently targeted by government agencies, plaintiff’s lawyers and unions. A company being targeted can find itself with unwanted publicity and unionization by existing workers and because of the previously lax laws regarding worker classification many companies are finding themselves in trouble and fines because of their misclassification. 

Several states have passed laws or are initiating legislation related to proper worker classification. Any Indianapolis Courier company and Pittsburgh Courier Company is going to have to be sure that they are not misclassifying their employee and independent contractors because both the state of Indiana and Pennsylvania introduced new legislation to take aggressive measures against worker misclassification.

There are important factors to remember when you own and/or operate a company that relies on the independent contractor model.  One of the most important being the use of properly worded formal written agreement between the independent contractor and the company. This agreement needs to highlight the rights of each party, the services that will be performed and many other facets of the business. The written and signed agreement needs to be kept in the contractor’s file along with other important documents to help distinguish the contractor from an employee if it is ever called into question. Contractor’s files should be looked at annually to check for any adjustments that need to be made. Taking a proactive approach with this issue is the best way to protect against the enforcement measures that are anticipated by state and federal legislation and the financial problems that could result.