Julie K. Fritsch, Attorney at Law, Montgomery & Andrews P.A.
Misclassifying an employee as an independent contractor isn’t always an intentional attempt by an employer to avoid paying payroll taxes, unemployment insurance and other employee benefits. Although the correct classification of a worker may be difficult to determine in many work relationships, employers are nonetheless responsible for classifying workers appropriately.
A determination by the IRS or Department of Labor that an employer has misclassified a worker or class of workers can have serious consequences for employers, including government audits and significant penalties. Nevertheless, safe harbors that can reduce or eliminate assessed penalties are available to employers.