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The battle between W-2 and 1099 - which classification are YOU!?


The U.S. Department of Labor (DOL) Wage and Hour Division is hard at work, and late in 2022, they proposed a change to how employers can determine if a worker is an Independent Contractor (1099) based on Federal Law. Sounds intense, right?


Employers can use an eligibility test on the DOL website that is pretty clear. Are they paid hourly or salary, or are they paid upon project completion? Do they use your equipment and materials or their own? Do you dictate their hours, or do they decide how and when they work? These can help you determine if your worker-bee is an employee or an independent contractor.


The proposed change breaks down six factors that can be used in determining which is being applied to your workers. Looking at the nature and the degree of the employer's right to control how the work is performed, the worker's opportunity for profit or loss depending on his or her managerial skill, the amount and nature of the worker's financial investment in their work compared to those of their employer, whether the service rendered requires special skill and is performed in the spirit of a business initiative, the degree of permanence of the working relationship, and the extent to which the service rendered is an integral part of the employer's business.


Katie has a ton to offer you in making these determinations and setting up offer letters to comply in these changing times. As a SHRM-certified pro, Katie can help you make the right decision and foster conversations and talking points to take on the conversations regarding the classification of your employees.

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