Quick Guide: W2 Employee or 1099 Independent Contractor

The minimum penalty for one instance of 1099 worker misclassification is $1,550*. If you have a roster of freelancers and aren't certain that you are in compliance, this free checklist serves as a handy reference. 

* Based on $50,000 in earned annual wages. 

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How to tell if someone is a W2 employee or a 1099 contractor?

Working with independent contractors lets companies complete special projects more efficiently and cost-effectively. But complying with tax and labor regulations can be complex. Did you know that 10-20% of all workers are misclassified?

This W2 Employee or 1099 Independent Contractor Compliance Guide equips you with the information needed to know the difference. Learn about the behavioral, financial and relationship control factors that affect classification and assign the right classification.

Generally, the more control you exert on a worker, the more likely he or she is likely to be considered an employee versus independent contractor. The more direction and training you provide, the more you undermine independent contractor status. Given the numerous varying factors involved, we created this quick guide. 

Please refer to the IRS website for more insight or ask your employment attorney.

What's in the Quick Guide?

  • A breakdown of the behavioral control factor that affect independent contractor classification

  • The financial control factors that affect classification

  • The key differences in the company-employee relationship and the company-1099 contractor relationship

Free download