INSURICA HRinsights - Employee or Independent Contractor?
Guidance on State and Federal Regulations and Definitions
Hiring an independent contractor offers employers many advantages. Unlike a traditional employee, an employer does not pay an independent contractor a wage or salary, federal and state payroll taxes on their earnings, social security tax, federal unemployment insurance tax, state unemployment insurance, workers’ compensation premiums, benefits or overtime.
However, state and federal regulations that determine whether someone is an independent contractor or an employee are different, and each state tends to have their own unique criteria. Misclassifying a worker can bring strict penalties and the Internal Revenue Service (IRS) has increased their audits of companies suspected of misusing the contractor title.
Do you know what is required for independent contractor status?
For complete detail, click here to read this informative article.