Having a clear understanding of how to properly classify your workforce is a fundamental requirement of business ownership. Worker classifications identify workers as either a W2 or a 1099 contractor. Those classifications require businesses to comply with specific state and federal laws.
Making the distinction between building a workforce of employees or contractors, may seem like a personal preference, but it goes far beyond that. Because making the wrong classification exposes businesses to potential penalties, fines, taxes, interest, late fees, and legal battles by mis-classified workers.
Those classified as an employee are privy to legal protections and benefits. Those protections are not always the same for independent contractors. And while many businesses see value and savings from hiring contractors, government officials take active measures to ensure that organizations are not purposefully mis-classifying workers to stifle the protections and benefits of individuals.
The consequences for mis-classification are significant. Avoid mis-classifications in your line of business by equipping yourself with the legal information you need. You can also check out our webinar W2 Employee or 1099 Contractor? Worker Classification: Feel Confident You are Getting it Right, led by Mimi Soule of Soule Employment Law Firm, for more information on how to avoid the pitfalls of worker classifications.
Gain an in-depth understanding of the factors that separate an employee from a contractor, and the state and federal laws that are attached to those classifications. Use this time to inform or remind yourself of the differences in classifications.
Walk away feeling confident that you are safeguarding your business from the ramifications that can come from worker classifications. Because the decisions you make regarding the classification of your workforce can be a determining factor of business success of failure.