Independent Contractor Compliance Blog - by Collabrus™

Bad Advice for Employers Who Utilize Independent Contractors – Continued

Last time I critiqued a website article published by a contingent work force vender company. This is part 2 of that series.
The website article cited a University of Arizona study but failed to provide full information about the study and then gave bad advice if you employ highly skilled professionals. I have analyzed this article […]

Bad Advice for Companies that Utilize Independent Contractors

I recently read an article on a website that gave bad advice for those who employ highly skilled professionals-especially independent contractors. The flawed article was based on a University of Arizona study.
I won’t cite the author, or organization, publishing the web article; however, we tracked down the original University of Arizona study and a series […]

Classic Misclassified Worker Scenario

One more domestic story from my stay-at-home week: the neighbor’s kid takes a freelance job.
I was recently home for a week watching television, sleeping and fighting off a bug. I was feeling better later in the week and took a walk around the neighborhood. As I passed my neighbor’s house, their 23 year old daughter […]

What IRS Auditors Look for When Auditing an Independent Contractor

IRS Auditors Look at More Than Accounting Records When Auditing an IC’s Business
Collabrus works on behalf of client companies to help them safely and cost-effectively engage contingent workers in their business. As such, most of the articles I write are employer-centric. In today’s article I will look at the issue of IC Compliance from the […]

The Tail Wagging the Dog on Independent Contractor Qualification

What’s wrong with saying, “He’s a 1099″ or “She’s a W-2?”
How many times have you’ve been in a business meeting and heard someone say something like, “Oh, he’s a 1099, so we don’t need to worry about his taxes…” or “We’re going to 1099 this person…”
It’s used as a convenient colloquialism, but once the magic […]

Recent Surveys Indicate 40% of Businesses are Planning to Rehire Workers

If you search the web you’ll find no shortage of news stories about how the economy is beginning to pick up, albeit slowly, and that many businesses who had downsized last year are beginning to replenish their labor force.
For example:

CareerBuilder/USA Today surveyed 2,924 hiring managers and reported 26% of employers have already started extending job […]

How to Be Ready Before the Worker Classification Audit Hits Your Company

I’m seeing an increased number of businesses being audited for worker misclassifications by both state and federal agencies.
In the past several months I’ve encountered a significant increase in the number of businesses who are currently being audited for employment taxes and misclassified workers by the IRS or a state employment tax agency. Oftentimes they are […]

What’s the Risk in Providing Tools and Equipment to a Consultant?

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. […]

I’m Calling My Elected Representative!

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 […]

Did You Know That At Least 70% of All Employment Tax Audits Result in a Tax Assessment?

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 […]

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