Not doing so can result in major ramifications. It is crucial that all workers are properly classified. Classifying a worker as an independent contractor can save money and cost of benefits.įor independent contractors, an employer only has to complete a form 1099 – MISC at the end of the tax year. Many businesses will use this to hire contractors rather than employees to help save money on their employment costs.īusinesses that are smaller and already working with minimal budgets are often tempted to use independent contractors even when an employee classification is necessary. If the employer does not have the power over those working on his or her tasks, the hired individual would be considered an independent contractor.
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