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Employees vs Contractors EBook US

Free Payroll eBooks for Small Business Owners and Startup Founders in the United States & Canada

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According to Section 530 of the Revenue Act of 1978 there is a reasonable basis (known as a safe harbour) for an employer misclassifying a worker, if the following criteria are met: • Judicial precedent, published rulings, or technical advice with respect to the tax- payer; • A past IRS audit in which there was no employment tax assessment attributable to the treatment of the individuals holding positions substantially similar; or • A long-standing recognised practice of a significant segment of the industry in which such individual was engaged. There must also be a precedent within the company, previous business, or sector for those types of workers to be treated as independent contractors, and the employer must have filled out Form 1099 MISC (Miscellaneous Income) for each worker, if such form was required. We hope you found this content helpful in determining whether you should hire employees or contractors for your business At Wagepoint, we can handle payroll for both your hourly or salaried employees and independent contractors To learn more about how Wagepoint can help your business, visit our website wagepoint.com or call us at 1-877-757-2272 today Consequences of Misclassification | Pg. 18

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