Our Approach

MBO Partners uses a disciplined, consistent process to evaluate contractors for compliance with the established guidelines of independent work. This approach eliminates client's 1099 reclassification risk and minimizes Federal tax risk, state tax risk, business liability risk, Sarbanes-Oxley compliance risk, and even the risk of co-employment lawsuits.

Please note: To minimize clients' risk potential, MBO Partners performs this process annually or at the onset of each new IC assignment (whichever is sooner), not simply as new independent contractors are engaged.

1. MBO Partners determines if an assessment is necessary. Independent contractors and consultants who are on an approved vendor list or whose services are on an exempt services list may not require an assessment. Also, contractors who are immediately willing to become W-2 employees of MBO Partners do not require an assessment.
   
2. If the assessment is necessary, MBO Partners instructs the independent contractor to complete online questionnaires. These questionnaires may be customized to clients' requirements. When appropriate, the results of the questionnaire are verified with the client engagement manager for accuracy.
   
3. Based on the results of the questionnaires, a qualified MBO Partners compliance expert ("Compliance Officer") produces the most accurate assessment possible and delivers his or her written recommendation.
   
4. If MBO Partners deems contractors to be qualified, they may begin (or continue) their assignments under 1099 tax reporting status. (They may also join MBO Partners as W-2 employees or as 1099s if desired.) MBO Partners establishes a "Compliance File" for each compliant independent contractor. This Compliance File includes all necessary supporting documentation, which is critical in the event of an audit.
5. When contractors are deemed not to be qualified, MBO Partners contacts them to explain the results and to provide instructions as to how they can become compliant. Simultaneously, we present our W-2 employment offering to them and direct them to enroll using the online MBO Partners system. At our clients' request, MBO Partners may indicate to the individuals that they are required to join MBO Partners in order to begin or continue the assignment. By becoming W-2 employees, contractors become compliant with the IRS and state taxation authorities, as all appropriate taxes are withheld automatically.
6. MBO Partners will stand by our determination, and we will indemnify the client organization from reclassification actions taken by federal, state, and local taxing agencies. Please talk with our contractor compliance experts to learn more about how this works.
   

MBO Partners is the preferred provider of independent contractor compliance assessments and solutions. Our dual-track engagement process means we can get virtually any independent consultant or contractor working for you quickly and safely, either as a fully compliant independent entity, or via our W-2 engagement program. Talk with our experts today for a customized solution.