The Coleman Consulting Group identifies key payroll issues that can jeopardize a business including overtime, recordkeeping, and, of course, misclassifying workers as independent contractors. They write:
The last hot-potato issue for employers is the distinction between employees and independent contractors (I/C). The IRS has very specific and strict criteria for the classification of an I/C; in a nutshell, “The more control a company exercises over how, when, where, and by whom work is performed, the more likely the workers are employees, not independent contractors.” Employers who erroneously classify employees as I/C are subject to fines and unpaid payroll taxes.
Wage and hour issues can quickly put a business in hot water and result in monetary penalties, embarrassment and loss of employee goodwill. It’s advisable to re-assess your company’s activities to ensure compliance with these important regulations.
Read the full story at Avoid the Payroll Issues That Can Jeopardize Your Business | Coleman