Employee Classification: W2 Employee vs. 1099 Contractor


Are you an employer with W2 employees and/or 1099 contractors? If so, do you understand the importance of accurately classifying workers as W2 employees vs. 1099 contractors?  There are different tax ramifications to both the employer and the individual as a result of that classification. With W2 employees, you are required to withhold certain taxes and pay payroll taxes. 1099 contractors essentially work for themselves and they are responsible for paying their own income taxes. There are numerous factors to be considered before classifying a worker. The classification is an important issue for tax purposes. If you misclassify the workers, various government agencies may audit your business to determine any discrepancies and they may impose substantial civil penalties or fines. If you need assistance to determine the proper classification of the workers for your business and the factors to be considered, contact the Business Law Group to speak to an attorney who can help you and your business.

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