Classification tests
Review behavioral and financial control, and the nature of the relationship, to classify correctly.
Tax and payroll implications
Employees require withholding, employer payroll taxes, and benefits; contractors receive gross payment and 1099 reporting.
Contracts & controls
Written agreements, deliverables, and independence indicators support contractor status when appropriate.
Risks & corrections
Misclassification can trigger back taxes, penalties, and interest. Consider voluntary classification settlement options if needed.