Employers should be aware of how they classify employees
The federal tax deadline is rapidly approaching and small businesses owners are already compiling their payroll information. However, one detail entrepreneurs should be very cognisant of is how they classify their employees. Starting this year, with the possible implementation of the Employee Misclassification Prevention Act, small business owners could be heavily penalized for incorrectly classifying full-time staff as contractors or temporary help.
The act falls under the Fair Labor Standards Act and stipulates that business owners properly classify workers because independent contractors often provide tax advantages for entrepreneurs.
According to Elaina Smiley of Meyer, Unkovic & Scott, those who improperly file contractors, part-time help or other independent operators could face financial penalties, retroactive liability, liquidated damages for attorney fees, workers' compensation errors, issues with benefits compensation and assuming responsibility for self-insuring benefits.
With the federal government in dire need of funding, the Internal Revenue Service may be on the look for any erroneous classifications. To ensure one's business taxes are done thoroughly and without error, entrepreneurs may want to consider hiring a secure, outsourced payroll processing service to complete all payroll needs.
All data and information provided on this news blog is for informational purposes only. Infinisource makes no representations as to accuracy, completeness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis. Information regarding employment suits and other legal action is not updated after publication, and may not be current.