The benefits of using nonemployee workers such as independent contractors are obvious: you don’t have to provide a contractor with expensive employee benefits, and you retain greater
flexibility to quickly alter your workforce as needs change. But if you make a mistake and incorrectly classify an employee as an independent contractor, the consequences can be devastating, especially if you’re a smaller employer. And large employers with a pattern of incorrectly treating workers as independent contractors can find themselves on the hook for millions of dollars in back taxes and unpaid benefits, including pensions and stock options.
Make sure you’re getting it right. Check out our exclusive 24-page Employer Guide, “Employee or Independent Contractor? Hiring and Classifying Contract Workers In California,” available free to CEA Online subscribers. In the Guide, we take you step-by-step through the process of evaluating whether a worker should be classified as an employee or an independent contractor. We examine the various tests for deciding a worker’s status and provide a handy 20-point checklist that can help you assess where you stand.