IRS Says Yes! You Can Pay Someone As An Employee And A Contractor!

Much to the delight of both financial management firms and their clients alike, a major limitation that barred workers from serving as both employees and independent contractors within the same organization simultaneously has been lifted.

Thanks to an official inquiry submitted to the IRS concerning the possibility for someone to collect income both on company payroll as well as through accounts payable for work done elsewhere in the company, the agency has issued a ruling stating that given certain criteria are met, this practice is acceptable.

Ruling remains a case-to-case affair

Although the ruling could have major implications for those attempting to work in multiple departments within their company, it is by no means broad in its practical scope. The IRS will still look closely at the specific nature of each position and make judgments accordingly. (more…)

Are Your Workers Independent Contractors Or Employees? Better Know The Difference

two pegs

Not sure if your workers are employees or independent contractors? If not, your company could be at risk.

In light of a recent federal and even more recent state government crackdowns on the misclassifying of employees as independent contractors, now might be a good time to revisit your worker classification decisions to ensure your company doesn’t get caught up in a lawsuit.

In addition to imposing new misclassification penalties, many states (Wisconsin included) have altered the process by which employers test whether or not a worker is, in fact, an employee. Unfortunately, this makes an already complicated classification process even more difficult.

The Internal Revenue Code requires employers to provide certain benefits to employees but not to independent contractors, which some employers have taken unlawful advantage of in recent years, knowingly or not. To avoid a classification lawsuit, the IRS requires employers to evaluate workers on three levels: (more…)