The bottom line on correct worker classification
One wrong classification can lead to costly tax assessments, wage claims, employee benefits issues, and penalties. Before deciding whether a worker is an employee or an independent contractor, it’s important to understand what the law actually requires.
The difference between employee and independent contractor status affects payroll taxes, overtime, minimum wage rules, and unemployment. If you have misclassified a worker, you could be subject to some hefty penalties.
Ensuring your workers are correctly classified matters to your business success. Here’s a quick reference chart that can help guide you.
You can also read more about Employee vs. Independent Contractor classification on our blog.