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Miscategorizing Employees as Independent Contractors Carries Serious Consequences

Miscategorizing Employees as Independent Contractors Carries Serious Consequences by Aaron Pierce

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It is vital that all employers understand how seriously both the IRS and state agencies take the issue of miscategorizing employees as independent contractors. Any appearance of impropriety is assumed to be the case. It’s understandable when you consider how much money a business can save by classifying an employee as a contractor: employer contributions to Social Security, Medicare, unemployment insurance, and worker’s compensation are non-existent in an independent contractor relationship.

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