1099 vs W-2: Are Your Contractors Actually Employees?
From Don't Waste the Chaos · 25:02
Show by Kerri M. Roberts
Calling someone a 1099 contractor does not make them one. The IRS does not care what you wrote on the agreement, it cares about who carries the control. If your "contractor" works 40 hours a week, only for you, on your schedule, with your tools, you may have an employee you're not paying taxes on. The good news is it's fixable, and it can be fixed calmly.In this episode, Kerri walks through:The three IRS control buckets: behavioral, financial, and relationshipA real contractor story, and the moment it needed to become a W-2 roleWhy you can pass the IRS test and still fail the DOL or state testThe ABC test in California, Massachusetts, and New Jersey, and why remote hires pull you inWhat a misclassification can cost: back taxes, doubled penalties, back wages, and personal liabilityThe Missouri gut check: $15 minimum wage, overtime, and final payKerri's one-page control checklist, and how to use AI to flag risky contractor agreementsYOUR ACTION ITEM: This week, pull a list of your 1099s, circle anyone who works only for you, on a schedule you set, using your tools, then find their agreements and ask AI to flag anything that reads like employee behavior.Not sure where your classification and compliance gaps are? Take the free HR Audit and see where you stand → saltandlightadvisors.com/hraudit Resources to keep building:🎯 Take the free HR Audit — Score your HR systems in 5 minutes and see exactly where your gaps are. 👉 saltandlightadvisors.com/hraudit📚 Explore the HR coursework — Self-paced courses, tools, and resources to build your HR systems step by step. 👉 saltandlightadvisors.com/resources✉️ Get the Monday Email — One practical idea for leaders, every Monday at 5:28am. 1,000+ leaders, 50%+ open rate. 👉 saltandlight.myflodesk.com/saltandlightadvisorsNeed fractional HR support or want to talk through a specific challenge? 👉 saltandlightadvisors.com/contact 📖 Mentioned in this episode: The HR Easy Button (book) — https://amzn.to/3SbYO0DThis is HR education, not legal advice.Don't waste the chaos - embrace it.Support the show
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