Workforce Management has a good update on the various legal skirmishes going on related to the worker classification suit the IRS has filed against Federal Express. Their description of the issue:
"Companies can create a more flexible workforce through the use of contractors, in addition to being able to avoid paying employment taxes. But worker advocates argue that such arrangements often amount to shams that let companies shirk both taxes and their responsibilities to workers who actually are employees under the law."
What is missing from this description is that a growing number of people want to be contractors. They are seeking the flexibility and work/life balance advantages contract work brings. Many also believe their contract wage rate more than makes up for lost benefits, and that being independent is actually more secure these days than working for a company.
We've posted in more detail on this issue in the past.