There is a rise in actions against companies when it comes to 1099 Independent Contractor classification. Simply the government wants the tax money and sees this issue as a way to get it.
If you are using 1099 Independent Contractors please make sure your policies and procedures are going to help you.
Here are some common worker misclassification audit triggers:
The 1099 independent contractor files a claim for unemployment benefits.
The 1099 independent contractor files a workers’ compensation or disability claim against the employer.
A worker receives a Form W-2 and a 1099 from the same employer in one year because they converted from a 1099 independent contractor to a direct hire of the company.
The worker feels they are being improperly treated as a 1099 independent contractor and files an unpaid minimum wage or overtime complaint with the Department of Labor’s Wage and Hour Division.
The worker feels they are being improperly treated as a 1099 independent contractor and files a Form SS-8 with the IRS for their own classification determination, or files a Form 8919, Uncollected Social Security Tax and Medicare Tax on Wages, with their personal income tax return.
The IRS is anonymously alerted about the worker or the employer not paying taxes.
High 1099 volume.
Work for the same company for a long time
Please let us know if we can help.
Turning Point Human Capital Management