If you are in accounts payable at a university or college one of your top compliance tasks this summer needs to be reviewing payments made to adjunt faculty. Regulators and judges are frequently finding these 1099 reportable payments to be misclassified.

For instance, in recent years California regulators ruled that a driver for Uber was an employee, not an independent contractor, and deserved back pay. FedEx agreed to a $288 million settlement after a federal appeals court ruled that the company had shortchanged over two thousand California delivery drivers on pay and benefits by improperly labeling them as independent contractors. FedEx also lost another case in a federal appeals court over misclassifying five hundred delivery drivers in Kansas. Meanwhile, trucking firms have lost two major court battles with drivers who claim that they, too, have been robbed of wages by being misclassified as independent contractors. Last month Lyft was ordered to pay $27 million for the same reasons. All of this is showing that courts and regulators are going after organizations that categorize employees as contractors in order to avoid wage and benefit costs.

Nevertheless, how do these issues involving less-skilled workers impact colleges and universities? That's simple. For one thing, most workers teaching classes are no longer tenured professors. In fact, most teachers are part-time and teaching classes at multiple institutions of higher education. This means that most teaching positions are being filled by what many universities and colleges have been considering to be 1099 reportable payees. However, long hours for low pay and no benefits is reaching it's limit.

Teachers are beginning to organize including by turning to the Service Employees International Union, the United Autoworkers, the American Federation of Teachers, and other unions for help. Simply put, and because of the prevailing lawsuits and regulatory activity sweeping the land the use of adjuncts at institutions of higher education is generating tremendous risk of facing in particular class-action lawsuits related to employment practices.

You need to think about this from a regulator's perspective. They see courses taught every semester by an interchangeable set of adjuncts, and the schools you work for doing just what trucking companies, housecleaning services, shipping companies, and now app-driven businesses such as Uber and Lyft have been accused of doing - misclassifying workers as contractors. What a regulator or judge sees is a teacher being asked to carry out similar responsibilities as full-time permanent staff but for less salary and no benefits. This means that in a regulator's eyes there may be grounds to believe that universities and colleges are evading their legal obligations as employers. What's more, with the overrepresentation of women in these jobs, it seems possible that many of these universities could be violating not only labor laws but civil-rights laws as well.

That said, we are here to help. If you are an accounts payable professional at an institution of higher learning we offer our TIR Answer Center (where you can ask questions of our tax attorney's about 1099 related issues such as these and receive an answer in two-business days or less). In addition, you can turn for help to our Compliance Guides - which also in part covers tips for handling workers your organization may have classified as 1099 reportable contractors but whom auditors and judges are finding to be W-2 payable employees! Don't be afraid to let us help make doing your job easier by responding to these formidable and increasing risks.