There has been a renewed interest in the distinction between employees and independent contractors. Bryan Koch, Managing Director at CBIZ & MHM Memphis, wrote an article discussing how this renewed interest can be attributed to the Affordable Care Act, as many of the provisions associated with the law relate to the number of employees working at a company.
In a previous article, the tests used to differentiate between employees and independent contractors were discussed. In this article, Bryan outlines four different fines and penalties that can be levied by the DOL if a worker is misclassified:
- Federal Income Tax
- Federal Insurance Contributions Act (FICA)
- Unemployment Tax
- Payroll Tax
Given the focus on this ACA-related topic, businesses should be aware of how they classify employees versus independent contractors. In order to avoid penalties and fines, it is important to stay up to date with changes in the tax code— especially with the consultation of a tax professional.
For the full article on our CBIZ Insights & Resources, click here.
To discuss how these potential penalties for misclassification can affect your business, contact Bryan at 901.685.5575 or firstname.lastname@example.org.