Many organizations do not understand the inherent risks associated with utilizing Independent Contractors. The basic risk comes from misclassification of the worker. It is estimated that as many as 70% of individuals (form SS-8) working as Independent Contractors are misclassified and should be considered normal W2 employees. The DOL has found that up to 30% of Independent Contractors are misclassified. The IRS has stepped up its audits for misclassifications. If the IRS determines that an Independent Contractor is misclassified, then at a minimum, the employer portions of Social Security, Medicare, Federal and State unemployment would be demanded from the “employer”. Often the organization may be liable for the employee portion of Social Security, Federal and State withholding, IRS and State penalties, interest, possible worker comp issues and employee benefits.
Infotree has developed fully customized software tools and solutions based on IRS guidelines. Using Infotree ’s proprietary software and our seasoned professionals, which include retired IRS agents, we can guarantee compliance to both IRS and DOL regulations. Infotree is currently helping numerous Fortune 500 stay compliant with regulations whiling retaining the flexibility that comes from Independent Contractors. If you need help with Independent Contractor vetting or compliance, please contact us to have one of experts get in touch with you.