Sep 072012
 
Make the Right Decision! - Exempt vs Non-Exempt vs Independent Contractor

Employers are always looking for ways to cut costs.  Be aware, however, that it can be easy to make risky decisions on how to classify your employees.  Whether it is with existing employees or additions to staff, be sure you are making informed decisions on what category your employees should be in and why. We understand that with these challenging times, business owners try to find as many ways as possible to control costs. Many are not aware that there are risks in making the wrong decision, even if it is out of “ignorance”. We all know that when it comes to the law, ignorance is no defense. Employers look at the rising cost of health benefits, coupled with high [...]

Jul 252008
 

One of our readers pointed out that the IRS recently updated its test for determining whether or not an employee is an independent contractor. The following information was copied from their website: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html Facts that provide evidence of the degree of control and independence fall into three categories: Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will [...]

Jul 242008
 

Employers who call their workers “independent contractors” merely to avoid unemployment, workers compensation insurance, and federal and state tax withholding etc. are headed for serious trouble with the Department of Labor (DOL) and/or the Internal Revenue Service (IRS). The IRS announced in May of 2007 that worker classification cases would be a major area of emphasis in 2008. In March of this year the DOL investigated a Texas water company and found that over 200 employees had been incorrect misclassified as independent contractors. The company ended up owing nearly $600,000 for two years of missed overtime pay. The IRS recently delivered FedEx a $319M tax hit due to classification issues. Is my worker an employee or independent contractor? Ask these [...]