Independent Contractors: Perhaps the Government Should Clean Up Its Own Mess

by Michael Haberman on September 27, 2010 · 0 comments


I have a WIN-WIN-WIN suggestion based on the following news story I heard on the WSB radio in Atlanta this morning. Scott Slade reported:

ONE REASON THE POSTAL SERVICE LOSES SO MUCH MONEY IS ITS USE OF THE PRIVATE-CONTRACTOR GAME. NEWLY RELEASED AUDITS SHOW THE AGENCY HAS HIRED BACK HUNDREDS OF FORMER TOP EXECUTIVES AND LOWER-LEVEL WORKERS AS PRIVATE CONSULTANTS, SOMETIMES AT TWICE THEIR OLD PAY SCALES…. THIS WEEK THE POSTAL SERVICE IS EXPECTED TO REPORT BILLIONS MORE IN LOSSES DUE TO DECLINING VOLUME. IT FACES A BUDGET GAP OF $230 BILLION OVER THE NEXT 10 YEARS.

Now if this was a large company in the private sector the Department of Labor and the IRS would be all over this abuse of the use of INDEPENDENT CONTRACTORS. I am pretty sure what the Post Office is doing would not pass the IRS rules for independent contractors. If you need to be remind of what these are you can read my post The IRS and HR: Who is an Employee?

What are the WINS in the IRS and USDOL cleaning up the Post Office?

  • Win #1: The Post Office will stem the loss of money. We need the Post Office to survive. (At least at my house anyway, my wife works for an envelope company. Send more letters!)
  • Win #2: The investigation of the Post Office will give the government some badly needed credibility. It will show they hold themselves to the same standard as they hold the private sector. (Well almost, you still cannot sue the government.) It could serve as a strong warning to the private sector to clean up their IC issues.
  • Win #3: Having investigators occupied with the Post Office will keep some of them out of the field investigating private companies. Someone out there, perhaps you, might get a reprieve.

There you have it. A WIN-WIN-WIN suggestion to start off a Monday. Do you see any other positives that could come out of this? What about the downside?

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{ 1 comment… read it below or add one }

Greg September 27, 2010 at 10:24 am

Great post Mike. The unfortunate reality is the government usually exempts themselves from the regulations that apply to the rest of us. Case in point the laws Congress pass that exempt themselves, (social security, etc.). It would be great if the IRS would investigate the USPS but honestly, I do not hold out much hope this situation will be resolved with the current administration. Rather I see the potential for another bailout at taxpayer expense instead of looking at how the operations could be more effecient, cost effective and productive. I do appreciate the reminder links for the rest of us who will have to comply with thesse regulations.

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