permatemps
The new permatemp issue
11/07/09 10:07 Filed in: miscellany
Confession
here - I was part of the Microsoft permatemp lawsuit,
and it is part of the reason I incorporated, so that
I could be hired with a clear understanding that I
was not an employee. Looks like the issue is heating
up again, as more and more companies lay off people,
and then re-hire them as temps. If they do that to
excess, the IRS may come examine ALL of their
contractors, which could include indexers.
Feds plan heap of random audits in early 2010
November 5, 2009 by Jared Bilski
Beginning in February, 6,000 random (unlucky) companies will start getting the IRS version of Happy New Year’s wishes: a notice they’re going to be audited over employment taxes.
While agents will be looking for an array of violations, they’re really targeting Form 1099 independent contractors who should be classified as regular employees.
And firms who are caught violating this are likely to receive hefty back tax bills and sizable fines.
IRS agents are also hoping to sniff out tax rule violations for exec pay and fringe benefits.
The random nature of these audits includes all companies — regular C corporations, S corps, partnerships, limited liability companies (LLCs), etc. — across all industry types.
According to the IRS’s chief of employment tax operations in the Small Business/Self-Employed Division, John Tuzynski, the audits will be conducted based on Form 941 and then they will work backward.
In addition to sterling documentation, doing an internal audit in the targeted areas may help ensure A/P and Payroll are thoroughly prepared should the IRS come knocking.
AND, another article on Fedex, and their slim survival of an IRS audit for contractor/true employee status:
Making matters even more complicated, even as the IRS let FedEx off the hook, the agency said it is taking a closer look at other companies that use contractors. The IRS announced that, starting in February, it will undertake extensive audits of 6,000 yet-to-be-named companies, in part to review employee classification. Meanwhile, lawmakers in several states—including New York, Maryland, Washington, Colorado, and Minnesota—have recently passed laws tightening rules over contract workers in an attempt to protect individuals and keep tax money flowing to state coffers.
MORE CONTRACTORS AHEAD
The legal definition of a worker turns on how much control a company has over the person: The more control, the more likely the individual will be considered an employee rather than a contractor. Littler Mendelson, a large law firm that represents employers, predicts that half of all Americans who are rehired after being laid off in the current downturn will return as "contingent" workers, such as contractors or temps.
Studies show contractors cost up to 30% less than payroll employees, mainly because they have to pay for their own benefits and employment taxes. They also aren't covered by most workplace laws, such as those related to discrimination and medical leave.
Feds plan heap of random audits in early 2010
November 5, 2009 by Jared Bilski
Beginning in February, 6,000 random (unlucky) companies will start getting the IRS version of Happy New Year’s wishes: a notice they’re going to be audited over employment taxes.
While agents will be looking for an array of violations, they’re really targeting Form 1099 independent contractors who should be classified as regular employees.
And firms who are caught violating this are likely to receive hefty back tax bills and sizable fines.
IRS agents are also hoping to sniff out tax rule violations for exec pay and fringe benefits.
The random nature of these audits includes all companies — regular C corporations, S corps, partnerships, limited liability companies (LLCs), etc. — across all industry types.
According to the IRS’s chief of employment tax operations in the Small Business/Self-Employed Division, John Tuzynski, the audits will be conducted based on Form 941 and then they will work backward.
In addition to sterling documentation, doing an internal audit in the targeted areas may help ensure A/P and Payroll are thoroughly prepared should the IRS come knocking.
AND, another article on Fedex, and their slim survival of an IRS audit for contractor/true employee status:
Making matters even more complicated, even as the IRS let FedEx off the hook, the agency said it is taking a closer look at other companies that use contractors. The IRS announced that, starting in February, it will undertake extensive audits of 6,000 yet-to-be-named companies, in part to review employee classification. Meanwhile, lawmakers in several states—including New York, Maryland, Washington, Colorado, and Minnesota—have recently passed laws tightening rules over contract workers in an attempt to protect individuals and keep tax money flowing to state coffers.
MORE CONTRACTORS AHEAD
The legal definition of a worker turns on how much control a company has over the person: The more control, the more likely the individual will be considered an employee rather than a contractor. Littler Mendelson, a large law firm that represents employers, predicts that half of all Americans who are rehired after being laid off in the current downturn will return as "contingent" workers, such as contractors or temps.
Studies show contractors cost up to 30% less than payroll employees, mainly because they have to pay for their own benefits and employment taxes. They also aren't covered by most workplace laws, such as those related to discrimination and medical leave.