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NEWS16 April 2013

US budget threatens respondent incentives

Government North America

US — American market researchers have warned that presidential budget proposals could potentially threaten research companies using respondent incentives.

President Obama’s proposed budget wants Department of Labor and Internal Revenue Service programs to investigate and deter the “misclassification” of employees as independent contractors and to effectively eliminate the independent contractor protections provided by Section 530 of the tax code.

According to the Office of Management and Budget, the proposal would garner nearly a billion dollars in revenue for the Treasury over 10 years by eliminating the protective ‘safe harbour’ in Section 530.

Director of government affairs for the Marketing Research Association Howard Fienberg said Federal regulatory agencies had been sceptical, if not hostile to research respondents’ status as independent contractors in recent years.

He added: “These proposals represent a potential threat to every research company using respondent incentives, where they all might have to treat respondents as employees, unnecessarily increasing costs and making it even harder to attract respondents.”

The presidential move is similar to one at State level where the association successfully fought off amendments to Washington State’s new Employee Fair Classification Act, which would have forced the profession to treat respondents as employees.

Fienberg added: “We urge Congress to support the common sense Research Fairness Act and to counter the White House’s targeting of independent contractors.”

@RESEARCH LIVE

2 Comments

7 years ago

I think it's entirely fair for respondents to pay tax on incentives. And it's easier for all concerned if agencies deduct it at source. The paperwork hassle of having to treat them as full employees is a genuine risk, though - so there should be a scheme allowing agencies to deduct a simple percentage equivalent to the standard income tax rate.

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7 years ago

Taxes from incentives = lower interest from respondents side + higher tax administration expenses. Wow! I think all researchers should feel Big Bro's fingers on the neck. Hope, our guys in Kremlin wan't read this post. Great formula to support american research industry!

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