What You Don’t Know About Employee Misclassification Can Hurt You
In 2015 the DOL and IRS launched a joint Worker Classification Initiative to combat employee misclassification, and to ensure that workers get the correct wages, benefits and protections that their classification allows. In recent years the DOL awarded $10.2 million to 19 states to implement or improve worker misclassification detection and enforcement initiatives in unemployment insurance programs.
The IRS determines employee classification by studying how much control an employer has over how the employee or contractor does their work. The chart below will help your organization determine whether your worker is an employee or an independent contractor.
Not sure how to classify your new worker? This chart can provide guidance.
In our free eBook, The Top Five Most Overlooked Areas of Payroll Compliance, employee classification is one of the five areas we cover that can put your organization at risk of non-compliance. Download the eBook today and also learn more about fringe benefits taxation, paying outside of payroll’s purview, properly calculating overtime, and the maintenance of employee records.