1099 Risk Blog

Michigan and Maryland Eye Misclassification

Michigan and Maryland are joining other states in bringing increased scrutiny at the local level toward the classification of workers as either contractors or employees. The employee misclassification debate is now heating up across the country, with most agencies now labeling misclassification as a pervasive form of tax evasion.

2008 is the year for businesses to come to terms with the fact that agencies at every level -- local, state, and federal -- are looking to recoup lost payroll tax revenue. They are awake, they are sharing information, and they are considering it well worth their effort to go after it.

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PA Bill to Make Misclassification a Felony

A Pennsylvania bill that would make the misclassification of employees as 1099 independent contractors a felony is making progress after passing in the House on Monday.

"Misclassifying employees as independent contractors is a tax-evasion strategy," the bill's sponsor, Delaware County Democrat Rep. Bryan R. Lentz said. "Until we impose harsh penalties on the practice, workers and law-abiding employers will continue to get cheated. When we allow some unscrupulous employers to avoid responsibility to their workers, we allow them to gain a competitive advantage over the vast majority of employers who do play by the rules and who do treat their employees fairly."

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New Hampshire Added To List of States Cracking Down on Contractor Misclassification

New Hampshire can now be added to the list of states (including CA, NY, and MA), putting together special task force initiatives to crack down on improper contractor classification.

As reported in today's Nashua Telegraph:

"Labor Commissioner George Copadis said Wednesday his department has received enough complaints about the practice that it is has teamed up with four other state agencies, including the attorney general’s office and the Department of Revenue, to look in to how big the problem really is.

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