2012 Press Releases

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NBAA Offers Guide to Independent Contractors

Contact: Dan Hubbard, (202) 783-9360, [email protected]

Washington, DC, April 26, 2012 – As business aviation operators continue to contain costs and accomplish more goals while conserving resources, many are turning to independent contractors – either directly or through third party organizations that specialize in providing contingent workers. Nationwide, four out of five companies use some sort of contingent labor. What many employers don't realize is that classifying a worker as an employee or independent contractor is a decision that must be made after carefully consulting federal and state law. If a worker is classified incorrectly, there are significant tax, liability, and legal risks for the employer. Now, the National Business Aviation Association (NBAA) has published a comprehensive guide aimed at helping flight operators properly classify workers as either employees or independent contractors.

Misclassification of workers could lead to significant problems as flight departments try to navigate the wide array of state and national regulations covering independent contractors.

"The U.S. Department of Labor has one standard it applies. The Internal Revenue Service has another. Then we have 50 states with, quite frankly, 50 different interpretations about what it means to be an employee versus an independent contractor," said employment law expert Greg Ripple at the firm of Miller Johnson in Grand Rapids, Michigan, who also serves as chair of NBAA's Employment Issues Working Group.

For government at all levels, tens of billions of dollars are on the line – money that could be lost if workers who should be classified as full- or part-time are instead treated as independent contractors. 

NBAA's Best Practices for Utilizing Independent Contractors outlines issues related to properly classifying independent contractors, providing employers with an overview of the various state and federal government tests they can use to determine the status of a worker. While the IRS has one test, other federal agencies have different tests - as do the various states. 

"This new NBAA resource is a must-have guide to navigating the classification of workers," said Scott O'Brien, a project manager at NBAA who worked with Association's Employment Issues Working Group and Aviation Insurance Committee to create the guide. "Not only does it address the tax and employment law considerations when using independent contractors, the guide also reviews how the status of a worker may affect aircraft insurance."

Best Practices for Utilizing Independent Contractors lays out several different scenarios to illustrate different employment classification issues. It also contains best practices managers can implement when planning to use an independent contractor or evaluating current arrangements with contingent workers.

The publication is available to NBAA members on the website, http://www.nbaa.org/contractors.

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Founded in 1947 and based in Washington, DC, the National Business Aviation Association (NBAA) is the leading organization for companies that rely on general aviation aircraft to help make their businesses more efficient, productive and successful. The Association represents more than 8,000 companies and provides more than 100 products and services to the business aviation community, including the NBAA Annual Meeting & Convention, the world's largest civil aviation trade show. Learn more about NBAA at www.nbaa.org.

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