Navigator Independent Contractor
Employee or Independent Contractor?
Independent contractor misclassification is perhaps the most difficult compliance issue that companies face today. With Congress, state legislators, federal and state agencies, unions, plaintiff’s attorneys and other groups all focused on regulating independent contracting, the legal updates and risks are seemingly endless.
Federal Laws vs. State Laws
Different federal and state laws apply different tests for IC status – three, four or even six different tests may apply to a single contractor under wage-hour, unemployment, workers’ compensation, employment tax, safety and equal opportunity laws. And with more than 40% of the U.S. workforce expected to be comprised of independent contractors within the next few years, determining whether to engage talent on a 1099 or W2 basis has become a crucial decision that needs to be made confidently.
How Do I know If It's an Independent Contractor or an Employee?
Navigator IC helps you take the guesswork out of this complex decision in a matter of minutes. And because we update all of our tools in real-time, you can be confident that the results and guidance you receive are accurate and up-to-date.
This Easy-to-Use Solution Provides You With:
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An easy-to-use questionnaire for inputting individual fact patterns
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Risk assessments driven by expert analysis of applicable federal and state regulations and over 1,700 court cases
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Instant, actionable guidance and a customized report on how to lower the risk of misclassification
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A summary of applicable laws
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A complete questionnaire transcript
Frequently Asked Independent Contractor Questions
In short, compliance is an organization's ability to abide by all labor laws that may apply to it. Compliance becomes especially tricky when you consider that there must be compliant policies in place for every local, state and federal law or requirement.
Yes! Laws for independent contractors greatly vary state-to-state. A great example of this is California's AB5, which is covered in detail in this Littler article.
In order to properly classify an employee as an independent contractor, you will need to apply all local, state and federal tests for IC status. A single independent contractor may have several different tests that are critical to consider, like wage-hour, unemployment, workers' compensation, employment tax, safety, and equal opportunity laws.
A 1099 (or 1000-R) form is a tax form that is used to provide information to the IRS regarding specific types of income from non-employment related sources. This form is commonly used with independent contractors.
A W-2 is a tax form that an employer fills out with information regarding an employee's wages and taxes. It is sent to the employee, the IRS, the SSA, and local and state tax authorities
An independent contractor is a self-employed individual or organization contracted to perform work or provide services as a non-employee.
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