To avoid misclassifying your workers follow these tips:
- Don’t make assumptions. If you are a business owner you should consult a tax professional and an attorney to ensure you are complying with IRS and labor laws when hiring staff or contractors.
- If contracting with staffing companies or labor brokers, make sure those agencies are properly classifying its workers as employees. Companies can be held responsible for labor violations of their contractors.
- Consider filing a SS-8 Form (Determination of Worker Status) with the IRS and ask that agency to determine whether the worker is an employee or independent contractor.
- Be aware that contractors set their own schedules and pricing, and perform the work as they see fit. If you want control over these areas, make sure you hire an employee.
- Check the workers’ compensation policies of any subcontractor you hire. (Look out for “ghost policies,” which aren’t designed to cover known employees.)
- Don’t rely on excuses such as “He only works a few days a week.” “She agreed to be an independent contractor.” “They use their own tools.” “He’s done this for so long he doesn’t need my supervision.”