As the economy continues to change, workers seeking a more flexible work environment and some who were displaced by corporate downsizing have become independent contractors. Also, the changing nature of employment and the increased use of those in the alternative workforce by businesses, including independent contractors (ICs), has attracted the attention of policymakers, because the prevailing employment and labor laws often do not cover those in the alternative workforce. The purpose of the study was to provide a better understanding of the IC work arrangement and its potential impact on Unemployment Insurance (UI). The research design addressed the following questions: Who are ICs? Is there a variance in the IC classification system? Which occupations and industries are they in? Is the IC phenomenon employer driven or worker driven? Do employers deliberately misclassify employees as ICs, and if so, what is the impact on trust funds?