Independent contractor misclassification may seem like a far-off idea—something that only happens to very large companies, like FedEx or Citigroup. After all, does the government really care about the details of how a small business engages freelance writers for website copy? The truth is, because audits are private, you only hear about high profile cases that become class action lawsuits. Businesses of all sizes receive the dreaded audit notice. As the independent workforce continues to grow, the issue of worker classification has been thrust into the spotlight and audit occurrences have become more frequent.
In order to prepare your company for a possible audit, it is key to undertand the potential triggers. These include:
Our guide outlines the steps to take if you are audited. These include:
Our guide offers detailed information on the 15 best practices to implement in order to avoid a misclassification audit. These include:
To learn additional steps you can take to minimize your audit risk while continuing to leverage independent talent, download our guide.
MBO Partners developed a calculator that quantifies what we can: the IRS component of the risk. Our legal team scoured the IRS code and assembled the possible penalties into a single easy-to-use calculator.
Learn how to define and when to hire a 1099 independent contractor, temp or full time employee in order to avoid misclassification risks.