Why does providing items like a computer, email, telephone, office supplies, tools, software applications, workspace, etc. tend to make someone an employee?
Many would argue that since “direction and control” is the primary factor that as long as you let the consultant have freedom on how to do the work he/she is an independent contractor. […]
An auditor is deep into your worker classification practices and you realize you really weren’t ready for this. So you decide to call your elected politician and ask for reasons. You ask your state assembly member, governor, US Congressman, or US Senator, “Please get the tax auditor off my back.”
In the over 30 years I […]
That’s right! For example, California’s EDD doesn’t publish this fact (government agencies don’t like to publicize these statistics) but at least 70% of all companies audited by them receive a tax assessment for misclassified workers, including back payroll taxes with penalties and interest.
There are some reports that the IRS’ finds misclassified workers in 90% of […]
Depending on a one size fits all automated questionnaire to determine the status of your consultants is dangerous for your company. You could be putting a lot of faith in a slick, easy tool that won’t hold up when the classification is challenged. Why?
The level of detail needed to correctly make an IC classification decision […]
Many third party venders, who provide IC compliance services, use a one size fits all, automated questionnaire. At lot of effort is put into making these online systems look pretty. They attract the innocent because they seem so easy and efficient, but they have their pros and cons:
Pros:
They are fast to take, typically requiring about […]
The other day I was asking a client about a consultant and she told me she wasn’t sure how long he had been working there. I asked if she had a way to find out and she said, “Maybe, I think he’s been here awhile, on several different projects…I’ll have to check with Procurement and HR, […]
What do you do when you realize the legitimate IC you brought in a year and a half ago has evolved into a misclassified employee and your company is now at risk for:
Civil lawsuits for overtime, health benefits, retirement, stock options and other fringe benefits.
A costly tax audit by the IRS or EDD.
Liabilities and fines […]
Did you know:
Over 70% of all employment tax audits result in finding misclassified workers?
The EDD and the IRS win 90% of the cases that go to hearing or trial?
During this recession, the EDD and the IRS have been getting increased funding to enforce IC compliance?
It is too late to prepare for an audit challenge after […]
Many are predicting the economy will be recovering in the next 6 to 18 months. Every thing goes faster these days so once the recovery begins to catch, things will happen fast. The leaders (those who are ready) will get the best accounts and the best workers. Can you afford to sit back and wait until […]
Often times, clients want a quick, easy solution to the IC compliance question.
Unfortunately, a simple answer won’t work when it comes to who is an employee or independent contractor. There is NO universal formula where “if you do this you have an IC…”
Common law is too complex for an easy answer
In the previous article I used the […]
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