The U.S. Department of Labor announced that they have earmarked $25 million to hire enforcement staff and agents to investigate companies who have classified workers as Independent Contractors when they are in fact employees. At the same time, the IRS plans to conduct 6,000 audits over the next three years because they believe misclassification is widespread. High tech, construction and home health industries have become targeted industry groups, as misclassification is believed to be widespread there. The federal and state governments believe that many employers are "harming workers" and "depriving them protections" granted to employees only. These agencies also know that misclassification is costing the government billions of dollars in lost tax revenues.

As an employee, workers are afforded many benefits and protections not given to independent contractors. These include unemployment compensation, workers' compensation and employment law protections, to name a few. So how do employers determine whether a worker is an employee or an independent contractor? Differentiating between the two is so difficult that even the courts have struggled with the issue. Every government agency has different criteria and tests to determine the correct status . The responsibility for making the right call falls on the employer. With multiple tests for different agencies and different court interpretations, employers who misclassify can expect big problems.

As employee misclassification continues to come under scrutiny, it is important for employers to be careful in classifying independent contractors in light of the potential risks. Along with payment of back taxes and potential interest also come heavy penalties, personal liability of corporate owners, possible criminal sanctions and the possibility of losing government contracts for federal contractors.

All employers who engage independent contractors should review each of their contractors and run the tests of each state and federal agency. Remember, a government audit will be painful, time consuming and very expensive.

Call me if you need assistance. I can help.

A recent SHRM survey found that the number of sexual harassment claims in the last 24 months has not changed. The upward surge has stopped. In fiscal 2009, the Equal Employment Opportunity Commission (EEOC) reported a slight decline in changes brought before them. That's good news.

Part of the reason for this stabilization is training. The SHRM survey reported 80% of the respondents provided sexual harassment prevention training to all their employees, with the largest portion doing so annually or every other year.

Prevention is the best tool to eliminate sexual harassment in the workplace. The EEOC strongly encourages employers to take steps to prevent harassment from occurring. That includes training, an effective complaint procedure and for employers to take immediate and appropriate action when an employee complains.

Change that by visiting my website or emailing us at rick@dacri.com for details of a special author- autographed edition.

On April 15, 2010, Congress passed the Continuing Extension Act of 2010 which extended the COBRA subsidy eligibility period to include individuals who are involuntarily terminated on or before May 31, 2010. The subsidy covers 65% of the cost of COBRA coverage.

Last month, Congress extended the COBRA subsidy eligibility period to March 31, 2010. The Extension Act extends eligibility retroactively, so individuals involuntarily terminated after March 31st but before the Extension Act was passed are now eligible to receive the subsidy. The Extension Act requires employers to notify these former employees regarding eligibility.

I will be speaking before the following groups:

Unemployed Professionals at the Portland Public Library on May 27. I will be speaking on "What employers are looking for in a new hire."

Northeast Public Power Association Annual Conference on August 16. I will be speaking to Commissioners and Trustees on "Hiring Your Next General Manager."

Maine City and Town Managers Insitutue on August 20. My topic will be "Uncomplicating Management."

If your group needs a speaker, let me know. I am booking a number of engagements throughout the year. Call now so that we can guarantee your date.

I have developed a number of tools and booklets to help you manage your workforce. These include:

• Sexual Harassment Prevention Toolbox
• Preventing Discrimination & Harassment Guide
• Strategies to Survive a Tough Economic Downturn Guide
• Guide To Massachusetts Employment Laws for Managers
• Employment Laws for Maine Organizations