This document provides an overview of the differences between classifying workers as employees versus independent contractors. It discusses the various tests used by the IRS, US Department of Labor, US Supreme Court and Pennsylvania Department of Labor to determine status. The document notes that no single factor determines classification and that the tests examine the degree of control over the worker and the economic realities of the relationship. It also summarizes the potential consequences of misclassification and an IRS program for voluntarily reclassifying workers.
Independent Contractors v. Employees-- How to Avoid MisclassificationDeirdreJ6972
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Employers are fans of independent contractors, for some obvious reasons. The IRS and Department of Labor know this too. Don\'t get caught misclassifying your employees as contractors. Be smart and be wary.
Independent Contractors v. Employees-- How to Avoid MisclassificationDeirdreJ6972
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Employers are fans of independent contractors, for some obvious reasons. The IRS and Department of Labor know this too. Don\'t get caught misclassifying your employees as contractors. Be smart and be wary.
The first of its kind, this seminar is held to provide participants with the knowledge and skills to effectively identify common workplace misconduct i.e. minor or major misconduct. It will also share the best approach in undertaking appropriate disciplinary actions, ensuring its compliance with the Employment Practices.
An individual who contracts with an entity to perform a service independent of the entityâs management and control is considered to be an Independent Contractor (IC)
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The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
The first of its kind, this seminar is held to provide participants with the knowledge and skills to effectively identify common workplace misconduct i.e. minor or major misconduct. It will also share the best approach in undertaking appropriate disciplinary actions, ensuring its compliance with the Employment Practices.
An individual who contracts with an entity to perform a service independent of the entityâs management and control is considered to be an Independent Contractor (IC)
White Paper: Complying With Regulations Regarding Temporary Workersss
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The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
A Modern Look at Contractors v. EmployeesDiana Maier
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Whether youâre a business owner concerned with making the right distinctions when engaging people to work with/for you, or a lawyer responsible for advising clients on the contractor v. employee distinction, this presentation could save you a lot of grief and money down the line.
Marin County-based employment lawyer Diana Maier and Carlos E. Torres, a Hearing Officer for the California Division of Labor Standards Enforcement (DLSE), discuss which factors matter most in deciding how to classify workers in light of recent legal decisions that are shifting those factors. In addition to covering a broad overview of the contractor v. employee debate, they also discuss ethical considerations for lawyers considering the question of contractor classification, and assess whether the sharing economy is due for extinction in light of recent rulings against companies such as Uber.
243Chapter Overview 12.1 Agency⢠Types of Agencies.docxvickeryr87
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243
Chapter Overview
12.1 Agency
⢠Types of Agencies
⢠Formation of the Agency
⢠Agentâs Duties
⢠Principalâs Duties
⢠The Principalâs Liability for the Agentâs Contracts
⢠The Agentâs Liability on the Contract
⢠Tort Liability and Agency
12.2 Termination of Agency
⢠Voluntary Termination
⢠Termination by Operation of Law
⢠Irrevocable Agencies
⢠Notice to Third Parties Upon Termination of
an Agency
12.3 Employment and Labor Law
⢠Labor Law
⢠Employment Discrimination
12.4 Chapter Summary
⢠Focus on Ethics
⢠Case Study: Weingart v. Directoire Restaurant, Inc.
⢠Case Study: Christopher v. SmithKline Beecham Corp.
Critical Thinking Questions
⢠Hypothetical Case Problems
⢠Key Terms
12
Learning Objectives
After studying this chapter, you will
be able to:
1. Describe how agencies are created and
terminated.
2. Discuss the rights and duties of principals
and agents.
3. Explain the liability of principals and
agents to third parties.
4. Describe some ways in which employment
is regulated by the government.
Agency and
Employment Law
Scott Anderson/Associated Press
rog80328_12_c12_243-266.indd 243 9/20/16 11:03 AM
Š 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.
244
CHAPTER 12Section 12.1 Agency
Todayâs businesses are primarily made up of a series of legal relationships. Compa-nies hire employees and independent contractors to do their work. Although the law gives the parties some freedom to structure their own relationships through
bargaining collectively or individually, both the common law and government regula-
tions also impose some restrictions.
Although it sometimes may seem that government is taking on a big role in regulation of
business relationships, in fact the United States has fewer laws protecting workers than
any other industrialized nation. Most of these countries, including Canada, Japan, and
the Eurozone, prevent an employer from terminating employees without due cause, and
require more in terms of benefits.
The rules of agency law come from the common law, and potentially apply to any situa-
tion where one person is acting for another, even if it is as informal as picking up a carton
of milk from the grocery store for your roommate, or as complex as the president of a mul-
tinational corporation making a million-dollar deal. Employment and labor law, on the
other hand, are statutory regulations the government has enacted to govern some aspects
of employer-employee relations. In this chapter we shall examine all of these areas of law.
12.1 Agency
An agency is a relationship where one party, the agent, agrees to act on behalf of another, the principal. Agencies are crucial to modern business relationships, since it is almost impossible for the owner of a business to conduct all transac-
tions without help. Without agency law, corporations could not exist at all. Corporations
can only function through their agents, since a corporation is an ent.
This presentation explains the distinction between independent contractors and employees and advises employers how to avoid the costly errors of misclassifying employees as contractors.
1099 v. W-2 Employees: What to Know and Why It Matters
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Inevitably, you will need the services and/or skill sets of other people to get your business running. When you begin to add people to your lean start-up, the initial question will be whether or not each person will be an employee or independent contractor. This seminar will help you understand the pros and cons of each type of relationship, and the legal risks in one vs. the other.
If you hire even one employee, there are HR legal compliance issues you will need to address. This seminar also discusses the HR issues that are most important as you begin to add employees, such as:
-Your obligations under wage laws and employment verification laws
-Approaching incentive compensation
-Protecting your confidential information and trade secrets
Employees vs. Independent Contractors - James IrvingTrine Medina
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James Irving presented on the differences of classifying an employee as an employee, independent contractor or intern and why it matters. He also provided guidance on what employers should to reduce the risks associated with misclassification.
Putting the SPARK into Virtual Training.pptxCynthia Clay
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This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Unveiling the Secrets How Does Generative AI Work.pdfSam H
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At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
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Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.đ¤Ż
We will dig deeper into:
1. How to capture video testimonials that convert from your audience đĽ
2. How to leverage your testimonials to boost your sales đ˛
3. How you can capture more CRM data to understand your audience better through video testimonials. đ
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
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Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
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Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
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Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
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This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
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Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, youâll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Independent Contractors and Employees: Understanding the Difference
1. KG
L
BUSINESS LAW EMPLOYMENT LAW SOCIAL MEDIA LAW HIPAA
INTERNET LAW UNEMPLOYMEN T COMPENSATION
HOME HEALTHCARE ADVANCED DIRECTIVES CEMETERY LAW
THE KAMBER LAW GROUP
A Professional
Corporation
The Law At Work.
1275 GLENLIVET DRIVE , SUITE 100
ALLENTOWN , PENNSYLVANIA 18106
TEL: 484.224.3059 | FAX: 484.224.2999
INFO@KAMBERLAWGROUP.COM
Find Us on
2. INDEPENDENT CONTRACTOR
VS.
EMPLOYEE STATUS
Deirdre Kamber Todd, Esq.
DKamberTodd@KamberLawGroup.com
Copyright 2012 (c) Deirdre Kamber Todd 2
3. Independent Contractor vs.
Employee
ď§ No one ever claims to be an employee when
they are actually an independent contractor.
ď§ Why?
ď§ Thatâs why we are here.
Copyright 2012 (c) Deirdre Kamber Todd 3
4. Deirdre Kamber Todd, Esq.
Areas of Practice:
⢠Employment and Business Law
⢠Social Media/Internet
⢠HIPAA
⢠Contracts
⢠Unemployment Compensation
Admitted: Pennsylvania, New York and U.S. Supreme Court
Expert Witness: Social Media, Lehigh County Court
Deirdre Kamber DeirdreJKamber
Kamber Law Group @DKamberTodd
Copyright 2012 (c) Deirdre Kamber Todd 4
5. What is the difference between an I.C.
and an employee?
⢠Generally speaking, an employee is one who is
hired to work under the direction and control of
the employer
⢠An employee does not represent the employer.
Copyright 2012 (c) Deirdre Kamber Todd 5
6. What is the difference between an I.C.
and an employee?
⢠An independent contractor is hired by an employer
to perform a specific task.
⢠The key distinction between an independent
contractor and an employee is that the
independent contractor performs the task
according to the contractorâs own methods â the
contractor is not controlled with respect to the job
performance
Copyright 2012 (c) Deirdre Kamber Todd 6
7. Employee Status
⢠Classification of a hired party as an employee or agent
(versus an independent contractor) will vary based on the
law(s) involved and the relevant criteria
Copyright 2012 (c) Deirdre Kamber Todd 7
9. IRS Test
⢠Behavioral: Does the company control or have the right
to control what the worker does and how the worker
does his or her job?
⢠Financial: Are the business aspects of the workerâs job
controlled by the payer? (these include things like how
worker is paid, whether expenses are reimbursed, who
provides tools/supplies, etc.)
⢠Type of Relationship: Are there written contracts or
employee type benefits (i.e. pension plan, insurance,
vacation pay, etc.)? Will the relationship continue and
is the work performed a key aspect of the business?
Copyright 2012 (c) Deirdre Kamber Todd 9
10. ⢠Level of instruction. If the company directs when, where, and how
work is done, this control indicates a possible employment
relationship.
⢠Amount of training. Requesting workers to undergo company-
provided training suggests an employment relationship since the
company is directing the methods by which work is accomplished.
⢠Degree of business integration. Workers whose services are
integrated into business operations or significantly affect business
success are likely to be considered employees.
⢠Extent of personal services. Companies that insist on a particular
person performing the work assert a degree of control that suggests
an employment relationship. In contrast, independent contractors
typically are free to assign work to anyone.
Copyright 2012 (c) Deirdre Kamber Todd 10
11. ⢠Control of assistants. If a company hires, supervises, and pays a
worker's assistants, this control indicates a possible employment
relationship. If the worker retains control over hiring, supervising, and
paying helpers, this arrangement suggests an independent contractor
relationship.
⢠Flexibility of schedule. People whose hours or days of work are
dictated by a company are apt to qualify as its employees.
⢠Continuity of relationship. A continuous relationship between a
company and a worker indicates a possible employment relationship.
However, an independent contractor arrangement can involve an
ongoing relationship for multiple, sequential projects.
⢠Need for on-site services. Requiring someone to work on company
premisesâparticularly if the work can be performed elsewhereâ
indicates a possible employment relationship.
Copyright 2012 (c) Deirdre Kamber Todd 11
12. ⢠Method of payment. Hourly, weekly, or monthly pay schedules are
characteristic of employment relationships, unless the payments simply are
a convenient way of distributing a lump-sum fee. Payment on commission
or project completion is more characteristic of independent contractor
relationships.
⢠Sequence of work. If a company requires work to be performed in specific
order or sequence, this control suggests an employment relationship.
⢠Requirements for reports. If a worker regularly must provide written or oral
reports on the status of a project, this arrangement indicates a possible
employment relationship.
⢠Payment of business or travel expenses. Independent contractors typically
bear the cost of travel or business expenses, and most contractors set their
fees high enough to cover these costs. Direct reimbursement of travel and
other business costs by a company suggests an employment relationship.
Copyright 2012 (c) Deirdre Kamber Todd 12
13. ⢠Work for multiple companies. People who simultaneously provide
services for several unrelated companies are likely to qualify as
independent contractors.
⢠Provision of tools and materials. Workers who perform most of their
work using company-provided equipment, tools, and materials are more
likely to be considered employees. Work largely done using
independently obtained supplies or tools supports an independent
contractor finding.
⢠Investment in facilities. Independent contractors typically invest in and
maintain their own work facilities. In contrast, most employees rely on
their employer to provide work facilities.
⢠Realization of profit or loss. Workers who receive predetermined
earnings and have little chance to realize significant profit or loss through
their work generally are employees.
Copyright 2012 (c) Deirdre Kamber Todd 13
14. ⢠Control over discharge. A company's unilateral right to discharge a
worker suggests an employment relationship. In contrast, a company's
ability to terminate independent contractor relationships generally
depends on contract terms.
⢠Availability to public. If a worker regularly makes services available to the
general public, this supports an independent contractor determination.
⢠Right of termination. Most employees unilaterally can terminate their
work for a company without liability. Independent contractors cannot
terminate services without liability, except as allowed under their
contracts.
Copyright 2012 (c) Deirdre Kamber Todd 14
15. According to the IRS
⢠Businesses must weigh all these factors when determining
whether a worker is an employee or independent
contractor. Some factors may indicate that the worker is an
employee, while other factors indicate that the worker is an
independent contractor. There is no âmagicâ or set number
of factors that âmakesâ the worker an employee or an
independent contractor, and no one factor stands alone in
making this determination. Also, factors which are relevant
in one situation may not be relevant in another.
⢠http://www.irs.gov/businesses/small/article/0,,id=99921,0
0.html
Copyright 2012 (c) Deirdre Kamber Todd 15
16. According to the US DOL
⢠The Supreme Court has said that there is no definition that
solves all problems relating to the employer-employee
relationship under the Fair Labor Standards Act (FLSA).
⢠The Court has also said that determination of the relation
cannot be based on isolated factors or upon a single
characteristic, but depends upon the circumstances of the
whole activity.
⢠The goal of the analysis is to determine the underlying
economic reality of the situation and whether the individual is
economically dependent on the supposed employer.
Copyright 2012 (c) Deirdre Kamber Todd 16
17. According to the US Supreme Court
The factors that the Supreme Court has considered significant:
1. The extent to which the worker's services are an integral part of
the employer's business (examples: Does the worker play an
integral role in the business by performing the primary type of
work that the employer performs for his customers or clients?
Does the worker perform a discrete job that is one part of the
business' overall process of production? Does the worker
supervise any of the company's employees?)
2. The permanency of the relationship (i.e. how long has the worker
worked for the same company?)
Copyright 2012 (c) Deirdre Kamber Todd 17
18. According to the US Supreme Court
The factors that the Supreme Court has considered significant:
3. The amount of the worker's investment in facilities and
equipment (examples: Is the worker reimbursed for any
purchases or materials, supplies, etc.? Does the worker use his or
her own tools or equipment?)
4. The nature and degree of control by the principal (Examples: who
decides on what hours to be worked? Who is responsible for
quality control? Does the worker work for any other company(s)?
Who sets the pay rate?);
Copyright 2012 (c) Deirdre Kamber Todd 18
19. According to the US Supreme Court
The factors that the Supreme Court has considered significant:
4. The worker's opportunities for profit and loss (Examples: did the
worker make any investments such as insurance or bonding? Can the
worker earn a profit by performing the job more efficiently or
exercising managerial skill or suffer a loss of capital investment?); and
5. The level of skill required in performing the job and the amount of
initiative, judgment, or foresight in open market competition with
others required for the success of the claimed independent
enterprise (Examples: does the worker perform routine tasks
requiring little training? Does the worker advertise independently via
yellow pages, business cards, etc.? Does the worker have a separate
business site?).
Copyright 2012 (c) Deirdre Kamber Todd 19
20. Pa Depât of L&I (UC LAW)
⢠In order to be excluded from coverage, the person who performs
the services must meet two conditions pursuant to Section
4(l)(2)(B):
â The individual must be free from control or direction
over the performance of the services involved, and
â The individual is customarily engaged in an
independently established trade, occupation,
profession or business.
⢠Only if both of these conditions are met to the satisfaction of the
Department will the relationship be regarded as an "independent
contractor." Unless and until those criteria are met, the services
will be "employment" subject to the coverage of the UC Law.
Copyright 2012 (c) Deirdre Kamber Todd 20
21. Pa Depât of L&I (UC LAW)
The following items are not conclusive in determining "independent
contractor" status:
⢠Employer designation, either verbally or in writing, that an
individual is an "independent contractor";
⢠Statement by an individual that they are an "independent
contractor";
⢠Issuance of a Federal Form 1099.
⢠A written agreement does not prohibit an examination of the facts
to determine whether the performance of the services is subject
to control or direction of the employer. If the examination shows
either the exercise of or the right to exercise such control or
direction, then the worker would be considered an employee and
not an independent contractor.
⢠It is immaterial if the services are performed on a full-time, part-
time or casual basis.
Copyright 2012 (c) Deirdre Kamber Todd 21
22. Pa Depât of L&I (UC LAW)
⢠Issues surrounding "independent contractor" status normally arise
out of random employer audits or unemployment claims filed by
individuals who assert they were employees rather than
"independent contractors."
⢠The Office of UC Tax Services randomly selects employers for audit
to verify compliance with the UC Law.
⢠If issues arise concerning employee status such as those listed, an
employer should have sufficient documentation to support the
reasons for classifying an individual as an "independent
contractor."
⢠The Department will use all available information to determine a
workerâs status.
Copyright 2012 (c) Deirdre Kamber Todd 22
23. Pa Depât of L&I (UC LAW)
⢠The presumption of the UC Law confers automatic employee
status unless and until it is proven otherwise to the satisfaction of
the Department.
⢠Examples of relevant documentation would include copies of the
individualâs preprinted invoices, business forms and stationery,
Federal and State tax ID numbers, business telephone directory
listings, public advertisements soliciting business, Articles of
Incorporation and leases on business properties.
Copyright 2012 (c) Deirdre Kamber Todd 23
26. Other Issues
⢠Non-competition
⢠Advertising On Facebook and other Social Media (i.e. Morse
v. Mer)
⢠Contracts
⢠Opening Door To Larger Issues
⢠Back Taxes, Wages, UC, WC, Etc.
Copyright 2012 (c) Deirdre Kamber Todd 26
27. ⢠The IRS launched a national research project in which it
sent thousands of audit letters to employers.
⢠The IRS signed an MOU with the U.S. Department of
Labor to share information between them to reduce
misclassification.
⢠Employers may now reclassify independent contractors
as employees and limit the resulting federal payroll
taxes for their most recent tax year, plus avoid related
penalties and interest for prior years, under an IRS
program announced Wednesday.
⢠In Announcement 2011-64, the IRS outlined its new
Voluntary Classification Settlement Program (VCSP).
Copyright 2012 (c) Deirdre Kamber Todd 27
28. ⢠Employers can apply for the program using Form 8952,
Application for Voluntary Classification Settlement
Program, at least 60 days before they want to begin
treating the workers as employees.
⢠Unlike an existing settlement program for employers under
an IRS examination, the VCSP allows eligible taxpayers to
voluntarily enter into an agreement with the IRS.
⢠To participate, employers must submit an application and
agree to prospectively treat their workers or a class or
group of workers as employees in future tax periods.
⢠Employers must also agree to extend the period of
limitation on assessment of employment taxes for three
years three years.
Copyright 2012 (c) Deirdre Kamber Todd 28
29. ⢠Employers will pay 10% of the employment tax liability
otherwise due for the most recent tax year, which will
not be subject to interest or penalties.
⢠The IRS does not conduct an employment tax audit with
respect to the employerâs worker classification for prior
years.
⢠Employers whose worker classification has been
previously audited must have complied with results of
the audit. Also, employers must have consistently
treated workers as nonemployees, for whom they must
have filed all required Forms 1099 for the previous three
years.
Copyright 2012 (c) Deirdre Kamber Todd 29
30. ⢠The employment tax liability for the most recent year is
determined under the reduced rates of IRC § 3509, which
provides that:
â failure to deduct and withhold taxes arising from a worker
misclassification, the employerâs liability for the employeeâs
portion of FICA tax is limited to 20% of the normal employee
FICA tax.
⢠This percentage is doubled for disregard or willful neglect
of reporting requirements.
⢠To be eligible for the program, employers must not
currently be under audit by the IRS, the Labor Department
or a state agency concerning worker classification.
Copyright 2012 (c) Deirdre Kamber Todd 30
31. Questions?
Comments?
The Kamber Law Group, P.C.
Deirdre Kamber Todd, Esq.
DKamberTodd@KamberLawGroup.com
1275 Glenlivet Drive, Suite 100
Allentown, PA 18106
Tel: 484.224.3059 ďź Fax: 484.224.2999
Copyright 2012 (c) Deirdre Kamber Todd 31