On September 21, 2011, the IRS announced that it has initiated a new Voluntary Classification Settlement Program (VCSP). The VCSP will allow employers to resolve worker classification issues by voluntarily reclassifying current nonemployee workers as employees and making a nominal payment to cover past payroll taxes. To qualify, employers must:

Employers can reclassify workers by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before the date that the worker will be treated as an employee. The IRS also released Instructions for Form 8952. When a worker is reclassified, the employer will make a single payment, equal to one percent of the reclassified worker's wages over the past year, which will terminate the employer's previous payroll tax obligations for the employee.

The VCSP is designed to increase tax compliance and improve certainty among employers, employees and the government. It is part of an effort by the Federal Government to ensure that workers are correctly classified. On September 19, 2011, the US Department of Labor (DOL) entered into a memorandum of understanding with the IRS to improve efforts aimed at ensuring correct worker classification. The DOL also entered into agreements with 11 state agencies to ensure that employers do not improperly classify workers as nonemployees to avoid their obligations.