Independent Contractor Compliance Blog

There is nothing inherently wrong with out-of-state staffing companies wanting to do business in California.  Yet problems often arise if they fail to understand California’s strict independent contractor (IC) classification rules and environment.  Most other states have lenient rules to establish independent contractors compared to California.  Oftentimes staffing companies establish a successful system for IC [...]

Governor Brown recently signed Senate Bill 459 into law making it illegal to willfully misclassify employees as independent contractors.  The law provides authority to the California’s Labor Workforce Development Agency to assess civil penalties and take action against a person or employer violating the new law. This law allows California’s Labor Commissioner to levy a [...]

The American Dream is founded on the belief that an individual can build a business with determination and hard work, starting with nothing except an idea or a skill.  Being your own boss — an independent contractor — is at the heart of this dream. Successful independent contractors eventually grow their small business into a [...]

A recent survey by a commercial financial and retirement investment planning firm reported that as many as 64% of those over 55 are not prepared to retire in the traditional sense.  This is due mostly as a result of the recent financial market turmoil, however other factors play a role. The report indicated that 77% [...]

Last year I wrote in the article Classic Misclassified Worker Scenario about a conversation with my neighbor’s daughter, who recently graduated from college and accepted a position as a freelance, independent contractor (IC) software engineer. I won’t mention the company’s name. Last year she was excited about her booming career. She’d anticipated the IC position [...]

There are powerful economical, legal and political forces struggling to decide how prominent the use of independent contractors will be in the United States. The catalysts for this emerging battle are a sluggish world economy, increased international competition, and demographic shifts which are driving a talent shortage. Both sides are becoming more aggressive in the [...]

The universally known facts of today can become the lost, arcane knowledge of tomorrow. Memories fade and change over time. The common knowledge of today becomes lost as people move on and are involved in other projects. Sometimes records are even lost.  However, legal challenges, requiring detailed recall of facts and events, can occur several [...]

Washington DC-Recently IRS Commissioner Doug Shulman spoke at the National Press Club about his vision of the IRS in the future. I think his vision provides some interesting insights into how the IRS looks at compliance-not only income tax but also misclassifications and employment taxes. Shulman is expecting the IRS to receive more money to [...]

I hope you don’t hold it against me, but in a previous life I was a tax auditor for the government. As a rank and file auditor I performed approximately 800 audits before becoming a supervisor, then a district administrator and on up the line…From that experience I can tell you firsthand that auditors look [...]

One of the most common misconceptions about worker classification that I encounter with clients is the belief that a written contract defining the relationship with a consultant as that of an independent contractor, responsible for his own taxes, will protect the company from misclassification challenges by either tax agencies, labor law disputes, or in civil [...]