Independent Contractors (IC’s) – It’s All in the Name
Many businesses use I/C’s in conjunction with acknowledged employees. There are statutes that make certain workers employees, and hence subject to payroll taxes. But most working relationships are judged by common law – a set of 20 factors that auditors use to judge whether a worker is actually an independent contractor.
Two of those factors are in the name. Does the worker act independently from your control? Does the worker negotiate a contract that reflects the actual working relationship? Misclassified worker liability is the main focus of most payroll tax audits, and it can make the difference between keeping your doors open or closed. Let Mark review this practice in your company before the auditors do.