High Risk Summary (Red):
Based upon your answers to the self-audit, your company appears to be at high risk for violating worker classification laws. Your answers indicate that your worker, currently classified as an independent contractor, is likely serving as an employee of your organization. What does this mean for you? In the event of an audit by the IRS, your organization could be responsible for fines associated with this misclassification. This can include back taxes, penalties and other costs which can range in the millions.
Medium Risk Summary (Yellow):
Based upon your answers to the self-audit, your company appears to be at medium risk for violating worker classification laws. Your answers indicate that your worker, currently classified as an independent contractor, is in some cases potentially serving as an employee of your organization. What does this mean for you? In the event of an audit by the IRS, your organization could be responsible for fines associated with this potential misclassification. This may include back taxes, penalties and other costs which can range in the millions.
Low Risk Summary (Green):
Based upon your answers to the self-audit, your company is currently at a low risk for violating worker classification laws. Your answers indicate that your contractors are likely properly classified based upon IRS regulations. Due to the large risk associated with misclassification, you can never be too sure of your employment practices. Bringing in an expert to review your current systems and policies can often save you time and money in the future.
Additional Recommendations:
PayReel can help. We offer payroll solutions that help companies gain and maintain compliance with IRS, Department of Labor, and state labor laws. From automated online payroll solutions to expert advice from payroll professionals, we are a trusted advisor to our clients and would like the opportunity to help you. Contact us today.
