For the IRS, it’s a goldmine.
For businesses, it’s a minefield.
As the demand for qualified workers clashes head on with the widening U.S. skills gap, more businesses are turning to contract workers to fill the ranks. But companies face a tricky, often treacherous reality when classifying their new hires.
Just one innocent misstep can result in hefty IRS penalties. Even worse? The Feds are carefully combing company records, in hopes of gaining more revenue. That’s why many businesses turn to an Agent of Record like IES to ensure that every worker is correctly classified.
So what do you need to watch out for when classifying workers?
The IRS looks at several key aspects, including:
- The Economic Realities test
- The degree of control the company has over how and when the job is done
- If the worker is providing integral services to the company’s day-to-day operations
For over 40 years, the contract worker experts at IES have been helping companies nationwide stay compliant and avoid IRS penalties. Here are some valuable resources to help you gain a better understanding of this often-misunderstood area.
What you need to know about 1099 compliance:
IES 1099 Video
WOW (World of Work) Webinar “1099 or W-2? The Employee Misclassification Debate is Heating up in the Gig Economy”
The Gig Economy Pay Gap: Why Employers Should Care
How to avoid regulatory fire in gig economy
IC Compliance
