From the Statesman Journal Sunday May 1, 2016
The Department of Labor (DOL) and the Internal Revenue Service (IRS) are making it clear that they are not playing around anymore…not when it comes to employee classifications.
As an employer, there are no more excuses allotted to you. Either you are have to begin to implement the correct employee classifications per the government’s definition…or pay Uncle Sam. The SOL has made it abundantly clear that whether it’s an accidental misclassification or a deliberate attempt to avoid certain mandates, you will be penalized. It’s that simple.
Back when the Affordable Care Act (ACA) first passed, employers were absolutely in a panic over how to classify a contractor, full time vs. part-time employees, and what they should consider a seasonal employee. The IRS lad out clear rules on this and asked employers to pay attention.
And now they are starting to crack down. The government feels it has given all the business owners enough time to acclimate – at least by their standards – and you can bet you will be fined if you aren’t classifying employees correctly. It’s a big issue right now.
In fact, it is so big that the DOL is warning on their own website of the critical importance for employers to understand how seriously this is being taken. Here is a link: https://www.dol.gov/whd/workers/misclassification/
So, if you have been hiring contract labor to do work for you that is not on a per-project basis, or if you have imposed requirements on contractors about job duties such as specific hours of work or training you need to think about the potential consequences. When in doubt, hire employees, not contractors.
For more information you can go to the IRS website and do a search on this topic, or go to: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee