Certified Self-Employed: Adding Necessary Certainty to Worker Classification

170442564Over the past eight years or so, I have frequently written for Staffing Industry Analysts, and have spoken at a number of their events. While there is a collection of interesting areas that frequently draw an audience, perhaps no topic more quickly draws attention – and controversy – than that of worker classification. The reasons for this are many. First, businesses are invested in obtaining the right talent, at the right time, for the right job. Efficiency is absolutely necessary for business to continue.

At the same time, businesses are receiving conflicting and ever-changing messages from state, federal, and local government agencies and courts regarding the standards for them to classify workers. At times, I have pledged that someday I will count all of the different standards for “employee” status that exist around the country. There are many; and they are multiplying.

The confusion over how workers should be classified has resulted in a number of cottage consulting and legal industries; a great result for the consulting and legal industries, but decidedly bad for the American economy. What businesses need, and what consultants need, is certainty. Certainty without the cost/friction of consultants, lawyers, courts, accountants, and government agencies second guessing business decisions. If business, talent, and the government could come up with a solution which provides certainty, while at the same time protecting both workers and the government’s revenue stream, this would make doing business in America substantially less expensive, and substantially more attractive.

The “Certified Self-Employed” solution from MBO Partners fits this bill. It gives workers the option to elect to have themselves “certified” as self-employed. If they do so, their clients can engage them without spending hundreds of hours analyzing the classification compliance situation, or going through second-guessing from interested third parties. Also, the CSE solution requires workers to be paid by their own entities, as employees, thus ensuring the uninterrupted flow of revenue to the government. Lastly, the program is voluntary. Only workers who really want to be self-employed need to even consider going through the program.

The proposal also has taken pains to devise a workable solution; for example, including the Small Business Administration as the arbiter of standards for self-employability. This provides a stopgap against any abuse of the system.

The amount of time being wasted contemplating worker classification is destructive to efficiency. A critical answer like the CSE solution is necessary for the American economy to find efficient, frictionless certainty, and to move forward.

Eric Rumbaugh

Eric Rumbaugh
Eric H. Rumbaugh is a partner with the law firm of Michael Best & Friedrich LLP, headquartered in Milwaukee. He represents employers in labor, employment and employee benefits law matters.

Eric Rumbaugh

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