A common mistake many companies make is failing to report independent contractors (ICs) to the Employment Development Department (EDD) right after starting an engagement. In California, for example, the payer must report the IC to the EDD within 20 days of paying, or contracting to pay, $600 or more for personal services. Since you must [...]
At one time or another, almost every business has engaged a consultant who insists on being an independent contractor (IC) when s/he really doesn’t meet the qualification test. Often the consultant insists the only way s/he will work is as an IC. Everyone does what they believe is necessary to get the job done. In most [...]
The U.S. Department of Labor (DOL), working with some state employment agencies, is offering training that provides “dislocated workers the opportunity for early re-employment” through self-employment. This means that if someone has lost his/her job and wants to create a small business, there is a federal program than can help. The Self-Employment Assistance Program will [...]
Last September, the Internal Revenue Service (IRS) announced a new program for employers to voluntarily reclassify and report workers, previously considered independent contractors (IC), as employees. Under the program, eligible employers can obtain partial relief from federal payroll taxes they theoretically owe for past misclassifications, if they prospectively treat these workers as employees. To be [...]
I recently read an article that cited a survey of more than 1,400 CFOs from U.S. companies that have twenty or more employees on staff. These CFOs were asked: “What common mistake do companies make most in managing their employees?” Here are the three top responses: • Lack of communication between staff and management • Lack of recognition [...]
You may ask: Why would I want to change an independent contractor (IC) into an employee? Over the years, I’ve encountered numerous companies that engage the perfect independent contractor and slowly, inadvertently convert him/her into a misclassified employee. Here are some “best practices” of these misguided companies. You may use them to either follow their [...]
At Collabrus, we review working relationships and help clients determine the proper classification for projects and consultants: independent contractor (IC) or employee? If the consultants are ICs, we file the necessary reporting forms. If they are employees, we can put them on our temporary employee payroll and provide a full-range of benefits and protections. We [...]
California’s seasonally adjusted unemployment rate was 10.9% in February 2012, unchanged from the rate in January. The national unemployment rate for February was 8.3%, unchanged from January. The California Employment Development Department (EDD) reported the following industries added jobs in February: Information (9,300) Manufacturing (6,200) Educational and health services (6,100) Professional and business services (2,800) [...]
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 [...]
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