The Advisory


2022 Q4

Info on New Lease Accounting Standards and More on Our New Resources Page

We have added a new “Resources” page on our website, where you can access the following free information:

  • A newly posted topic video discussing the primary changes you can expect for implementing the new leasing standards under GAAP
  • Our handout on “Avoiding the Five Common Mistakes That Family Businesses Make”
  • Previous editions of this newsletter, going back to Q4 2020

…and more to come. Visit to check it out!

Proposed Labor Rule—Employees vs. Independent Contractors

In October, the U.S. Department of Labor proposed a new rule that would broaden the scope of workers required to be classified as employees rather than independent contractors. Under the new rule, any worker considered “economically dependent” on a company must be classified as an employee. This takes the following factors into consideration:

  • The worker’s opportunity for profit or loss
  • The worker’s investment in the job
  • The worker’s permanence
  • The degree of control by the employer over the worker
  • Whether the work is an integral part of the employer’s business

The proposed rule would generally increase costs for employers because any newly reclassified employees would need to be brought into the company’s benefit programs, and the company is then responsible for paying the employer’s share of payroll taxes on the employee’s wages.

For current independent contractors that are reclassified as employees, the effects are more of a mixed bag, with some of the following potential pros and cons:

  • Pro: Would be eligible for employer-provided benefits, which are often cheaper than the same when obtained individually
  • Pro: No longer subject to self-employment taxes
  • Pro: Guaranteed minimum wage and potentially eligible for overtime wages
  • Con: Can no longer deduct employment-related costs on Schedule C
  • Con: Potentially reduced “wages” due to increased employer costs

After the conclusion of the comment period, the finalized rule is expected to be announced in 2023.

For more on this, see “Biden Labor Proposal Shakes Up Gig Economy That Relies on Contractors.”