The following is an excerpt from our latest guide, "A Business Owner's Guide to HR: Is There a Better Way?"
Employee or Contractor?
Misclassifying individuals may open your organization to a number of risk factors and penalties. The U. S. Department of Labor issues guidance on classifying workers under the federal Fair Labor Standards Act (FLSA).
According to the IRS, obligations toward employees include requirements such as withholding income taxes and withholding and paying Social Security and Medicare taxes. These obligations do not exist for payments to independent contractors.
