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If You Are In AP Make Sure You Clearly Document Payee Status in 2022

Many of you might have missed the fact that on December 27th the National Labor Relations Board (NLRB) announced that it was reconsidering the concept of who is really an independent contractor, and who is really an employee. This follows on the heels of a memo where the NLRB’s general counsel asked the NLRB's various offices to submit cases to her that raised the question of whether the very act of misclassifying workers as independent contractors was itself a violation of the National Labor Relations Act.

If that happens it will change everything. Right now, when an employer is found to have misclassified a worker there are fines and the like but nothing happens to stop that practice. An NLRB ruling that misclassification violates the law  would thus be a game changer because it could force employers to treat nearly all workers as employees.  In our current "gig economy" this would mean millions being treated as contractors being shifted to employment status. That would likely mean your accounts payable team would have to conduct an extensive in-house audit identifying payees who might fall under such new standards and that would mean quite an increase in your work load.

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