January 2011

By: Nancy E. Joerg, Esq.

When clients are audited by the Illinois Department of Employment Security (IDES) and the company being audited uses independent contractors, the IDES auditor will often ask the company to fill out a Questionnaire called the Worker Relationship Questionnaire. The IDES auditor will evaluate the company’s responses to help decide whether the workers at issue in the audit are really independent contractors or misclassified employees under the IDES test for independent contractor status.

Many clients become very anxious in filling out the Questionnaire. The questions are somewhat confusing. It is difficult to know exactly how to respond so that it is clear to the auditor that the workers at issue are really independent contractors and not employees.

THREE SETS OF QUESTIONS: Clients wonder why the auditor is using a Questionnaire. If you study the strict three-part test [Section 212(A), (B), and (C)] that the Illinois Department of Employment Security uses to decide who is an independent contractor and who is an employee, you will realize that the Questionnaire is divided into three sections: the first set of questions asks about Section 212(B), the next set of questions asks about Section 212(C), and the last set of questions asks about Section 212(A).

REGULATIONS: There are also regulations to Section 212(A), (B), and (C) [56 Ill. Admin. Code Sec. 2732.200] which help to explain the IDES view of each part of the three-part test. Upon studying the regulations, it will become somewhat clear as to how the questions should be answered on the Questionnaire (to result in a finding by the auditor of independent contractor status for IDES purposes).

RESPONSES ARE CRUCIAL TO DEFENDING INDEPENDENT CONTRACTOR STATUS: The questions should of course be answered truthfully, but companies should be aware that the answers on the Questionnaire are crucial in defending independent contractor status and therefore should be answered thoroughly and carefully. Work with an attorney very experienced in defending companies who use independent contractors, before filling out the Questionnaire and handing it to the IDES auditor. This is not a task to be handled lightly. This is your legal defense!

Questions? Call Attorney Nancy E. Joerg of Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.