IRS Gives Employers Break on Misclassified Employees

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Does This New Worker Misclassification Development Offer Your Company Opportunity?

The Internal Revenue Service is offering a break to employers who come clean about wrongly classifying workers as independent contractors to avoid paying federal payroll taxes, the agency announced this week.

What happens when workers are considered independent contractors? Read the full article here...

Comment:

This is a great initiative and provides an opportunity that can definitely save your corporation money. A PEO can assist you by performing a risk analysis and give you a clear understanding of your level of risk. Based on those findings they can provide you with a customized package of services to assist your corporation and stop the non compliance moving forward. A wide range of services allowing for substantial cost saving and risk mitigation opportunities are available to you.

How Can Your Company Take Advantage of This Opportunity?

Risk Analysis

1. How many contractors do you have?
2. How long have they been under contract?
3. What type of agreement is there?
4. What has been signed?

Evaluation of Different Levels of Risk

1. Does contractor workforce meet criteria of independent?
2. Are they incorporated entities?
3. Do they carry their own insurance?
4. Do they have multiple customers?
5. Are they working on a specific project on or off site?

Potential  Elements of a PEO Custom Package

1. Thorough and strict onboarding process;
2. Comprehensive revisit of all existing contractors for status;
3. Process all contractors as employees who don’t qualify as contractors;
4. Add insurance to contractors as applicable at minimal cost;
5. Add easy to use web based system for time and expense entry;
6. Expand reporting capabilities for enhanced visibility of saving opportunities;
7. Other elements based on corporate need.

Expected Outcomes Based on Case Studies

1. Cost savings, potentially significant depending on current situation;
2. Risk mitigation that avoids costly fines and penalties of workforce misclassification;
3. Satisfied and happy workforce resulting in improved work environment and productivity.

What to do? We know that most companies are going to miss out on this opporunity and the decreased risk of misclassification fines and penalties as well as cost savings that go along with it...unfortunately! Take action now, contact a PSC today and let us help you determine what might be your best next step.

Interested in what our contractor audience thinks of our services? Check out our 2011 Contractor Survey Report FREE!