Watch Out Before Reclassifying Workers

An Internal Revenue Service crackdown on employers who improperly use independent contractors could force many small-business owners to make tough choices: Staff up and raise operating costs, or risk an audit that could have pricey penalties. “Small-business owners have an incentive to keep their headcounts below the level that will trigger a new regulatory burden that’s going to cost them money,” says David Lagasse, a partner at employment-law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. in New York.

“The IRS says it is rolling out the Voluntary Worker Classification Settlement Program to encourage businesses to correct the error, while not having to worry about a big penalty. Employers who opt into the program will owe 10% of the tax liability that would have been due on the employee’s compensation for the past year, without interest or penalties, according to IRS statements,” wrote Wall Street Journal writers Sarah E. Needleman and Emily Maltby.

To read the story in full visit

To get assistance from Foreman & Associates, LLC about worker classification and other business management needs, contact us at: info@foremanandassociates.info

Copyright 2011

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s