The workforce continues to evolve at the same tempo as the paceof technology.

In the U.S., we’ve just reached the milestone of 10 milliononline gig economy workers, who are working on-demand tooffset losses or boost pay.

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Shared workspaces, initially the realm of startups, have nowgone corporate, with established businesses starting to useco-working offices to save on expensive office rent while appealingto more current and flexible ways of working.

Today, it’s not uncommon for businesses to hire full-timeemployees, part-time or seasonal workers, and independentcontractors--who sit in geographically dispersed locations andacross multiple time zones.

The transformation of the modern workplace has also shone aspotlight on wage and hour obligations, which have not caught upwith how businesses have evolved.

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And perhaps unfortunately for many businesses, compliance islike insurance--ensuring compliance with wage and hour regulationsis not top of mind until an incident occurs.

The Department of Labor has been actively at loggerheads withbusinesses, particularly those in the on-demand economy for thelast 12 months, reaching a crescendo with numerous class actionlawsuits about employee misclassification.

In California, ride-sharing service Uber was ordered to pay more than $4,000 to onedriver it ruled had been misclassified as an independentcontractor, while Lyft has agreed to pay $12.25 million incompensations to drivers.

In 2015 alone, the Department of Labor uncovered more than $74 million in back wages fromwage and hour violations.

Interestingly, the Department of Labor has now issued guidancethat says that if a person is employed by more than one business(such is the norm when working in the on-demand economy), then bothbusinesses need to be wage and hour compliant for that worker.

The onus of responsibility is squarely in the company’s court tounderstand, monitor and meet their wage and hour obligations.

The latest guidance is an acknowledgement not only of thepervasiveness of employee misclassification, but also thedifficulty in creating rules that can catch up to the way wework.

Classifying a person as an independent contractor is fraught with risks--besides misclassificationlawsuits, companies may also be liable to civil lawsuits under theFair Labor Standards Act and/or state employment law.

Despite this, compliance continues to hover in the backgroundfor many businesses. Replicon recently surveyed over 120 humanresources professionals regarding their attitudes towards wage andhour compliance, and found that a whopping 37 percent ofrespondents were not sure of how compliant their organization was,or believed that their company’s company’s compliance policies needimprovement.

Even more disturbing, over two-thirds (67 percent) ofrespondents believed that their company had not conducted acompliance audit in the last 12 months, or were not sure that ithad taken place.

This is particularly worrying as 47 percent of the totalrespondents were also involved in compliance decisions at theirorganization.

Whether you’re a startup hiring independent contractors to helpyour business scale, or a global corporation with a diversifiedworkforce, wage and hour compliance should be top of mind.

Businesses need to stay within the current labor obligations toavoid costly settlements and damages to brand reputation, whilesupporting the expectations and flexible demands of theirworkforce. In the US, it’s currently safer for businesses torefrain from hiring independent contractors, given their lack offavorability from a legal standpoint.

How regulations will evolve to acknowledge the changes to theworkforce is anyone’s guess--but ultimately, providing the rightframework to hire and retain the best talent will win out everytime.