A handful of the employees affected in my group were re-hired as contractors.
Those states are going to have a field-day in the event of an audit. We had a ton of trouble recently with a contractor (who worked on his own time, with his own equipment, for a specific duration on a project)... I can only imagine what states will see when they find out they brought back former employees. It's going to be very difficult to justify them as contractors.
It was a single contractor, working on a project tangential to our primary codebase (an add-on product). He had several other clients and projects at the time and was paid by the hour for the work.
Part of the issue was that he was operating as sole proprietor, which meant he had no legal entity for his work. The state wanted to see that he was operating as a business and the lack of any legal entity surrounding his business made that a bit difficult.
We managed to get it sorted.. took more of our time than I'd like tho.
Those states are going to have a field-day in the event of an audit. We had a ton of trouble recently with a contractor (who worked on his own time, with his own equipment, for a specific duration on a project)... I can only imagine what states will see when they find out they brought back former employees. It's going to be very difficult to justify them as contractors.