On May 5th the Labor Department killed the prior administration's attempt to make it easier to classify some workers as 1099 reportable contractors. This means existing rules under the 1938 Fair Labor Standards Act will continue to be the standard in terms of determining whether a worker should be classified as a 1099 reportable independent contractor. And it looks like that move was only the first step in what will be an extensive crack down on employers that are alleged to misclassify workers as 1099 reportable that the Federal government believes should in fact be treated as W-2 reportable employees.

That's because the Labor Department is laying out a path whereby they will look at worker misclassification and then use probes to build the case for a ruling that supports protections for workers. That ruling could also be used to role back some protections workers lost recently in California and currently being attacked in states like Connecticut, Massachusetts and Missouri as Federal law in this case preempts state law. 

This is something you will want to pay attention to as this situation develops during the year. Remember, the Labor Department and IRS tend to work closely on such matters. Throw in state regulators and there is a dramatically increased chance any kind of look at your policies and procedures for onboarding new vendors and validating their 1099 work status can come under increased scrutiny.