Classify carefully | FocusAmbika Puniani Bailey
It's not uncommon for roofing contractors to hire independent
contractors to perform roofing work. Hiring independent contractors
can save employers money—employers don't have to pay
unemployment insurance, workers' compensation insurance or payroll
taxes for independent contractors. However, if you rely on
independent contractors, brace yourself for a potential audit by
the Internal Revenue Service (IRS).
In February, the agency announced a plan that includes randomly
examining 6,000 companies during the next three years for employee
misclassifications. The IRS anticipates levying up to $7 billion in
fines during the next 10 years for employee misclassifications.
Gene Zaino, president and chief executive officer of Herndon,
Va.-based MBO Partners, which specializes in the independent
contractor market, told CNNMoney.com: "Most states are now
sharing data with the IRS. … It used to be that if a business
ran into trouble with a state labor department or with the IRS, the
issue was isolated. Now, any kind of audit or compliance finding
can set off a domino effect where the other agencies will get in on
the action."
And the fines can be large. According to CNNMoney.com, Illinois fined
Chicago-based construction company Mega Builders $328,500 in
December 2009 because the company had misclassified 18 employees
as...
To read the article in its entirety, please log in or register (registration is free).
Log in or register for FREE access to this article and other Professional Roofing online content.