I just returned from a great informative panel on healthcare reform presented the by the LA chapter of the Association of Strategic Planning. I was surprised to learn that many large and smaller companies are trying to use the independent contractor designation to reduce healthcare benefits for employees. I wrote about a similar topic in the National Healthcare Reform Magazine back in August. My article warned employers about the misclassification of an employee, and how it could sabotage their tax credit.
What I didn’t think of, were companies intentionally trying to circumvent the tax laws in order to save healthcare insurance. This can be very risky. The IRS is no stranger to businesses trying to reclassify employees as independent contractors in order to save payroll taxes. The rules are complex and employee definitions differ from state to state. However, I tell clients that if you tell your “contractor” how to do his/her job, you run the risk of the person being classified as an employee(thunbnail definition.)
Now, I can imagine these companies trying to align themselves with the Fedex case where the U S District Court ruled the drivers as independent contractors instead of employees. But now the risks involved in this aggressive stance is not only healthcare insurance penalties, but payroll taxes, and workers’ compensation issues(not to mention labor law issues.)
Be very careful when classifying those who work for you. A tax professional may be your best friend in keeping you out of “fowl” play.
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There are certainly a lot of particulars like that to take into consideration. That may be a great point to deliver up. I provide the thoughts above as general inspiration however clearly there are questions like the one you convey up where a very powerful thing can be working in sincere good faith. I don?t know if finest practices have emerged around issues like that, but I’m certain that your job is clearly recognized as a good game. Each girls and boys really feel the impression of only a second抯 pleasure, for the remainder of their lives.