At first glance hiring all ICs seems financially savvy. Companies can avoid withholding and paying certain taxes. ICs need not be provided medical benefits, retirement, paid vacations or holidays. No overtime needs to be paid. No unemployment claims can be made against the company. Simply calling a worker an independent contractor, even in writing, will not automatically avoid FLSA violations.

Before a company dreams of converting all its employees to ICs, it needs to be aware of expensive consequences under the Fair Labor Standards Act of 1938 (FLSA). See full article here.