Looming change in U.S. worker classification rules will cost small businesses big bucks: report

0 Comment(s)Print E-mail Xinhua, August 5, 2022
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NEW YORK, Aug. 5 (Xinhua) -- The Joe Biden administration is changing the status of countless "independent contractors" to employees in its worker classification rules, which will have a big impact on costs for millions of small businesses in the United States, reported The Hill this week.

Small businesses rely on independent contractors to perform ad-hoc and infrequent tasks that usually do not require the attention of full-time employees. These freelancers, or "gig workers," are stand-alone entrepreneurs who oftentimes serve multiple customers, according to the report.

They're truck drivers, software developers, project managers, construction workers, content producers, health care professionals, counsellors and trainers. They belong to professional organizations that support freelancers.

The Biden administration feels that these independent contractors need more protections, and so the Department of Labor is taking action, said the report.

Through the change, small businesses have to classify these workers as employees. Along comes a big tax increase -- not only will small business owners have to withhold payroll taxes for these workers, but they'll also need to pay the employer's portion of both Social Security and Medicare taxes as well as any related state and local taxes. Enditem

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