1099 classification Archives • NexusCW

Every so often, I get the question from clients regarding proper classification of employee vs. independent contractor. Part of the reason why these questions are constantly being asked is that the exact definition of independent contractors vs. employees is not set in stone. Interpretation of laws and principals can provide a guide to employers in defining the business relationship between themselves and the candidate. As rule of thumb, I always use three sources when trying to answer these difficult questions. To define status of an independent contractor, I refer to common laws and principals adapted by federal government and the states, the Fair Labor Standards Act of 1938, and, finally, I take into account the decisions made by the courts. Especially in my home state of California, the third source of information gives me a road-map of what’s established as precedence from the courts… [Read More]

We are all aware of the potential financial penalties that Independent Contractor (IC) or contract worker misclassification can bring to a company, some have even experienced it. These misclassification can be particularly debilitating to a company’s bottom line, and thoughtful risk mitigation policies need to be established. Based on testimonials from our current clients, potential clients and industry veterans, a number of practices aimed at reducing misclassification risk have been implemented by well-intentioned organizations. Do they work? Well, not all of them, but some work very well. Others work only in combination, while some are simply myths. For a variety of reasons, these myths are embraced and can be difficult to dispel. Consulting with 1099 compliance professional can help, but before we get into that let’s meet the myths through the eyes of a hiring manager. Myth #1: Contractor is Incorporated Some view articles of… [Read More]