There are many reasons that employers need to understand the differences between 1099 vs W2. The misclassification of independent contractors is a serious issue our country is facing right now, and failing to meet rules and regulations in order to remain compliant could potentially land your company in hot water.
However, you do not only have to worry about one set of guidelines in order to make sure you are compliant. In fact, while the Department of Labor (DOL), and Internal Revenue Service (IRS) are the two agencies most commonly known for regulating independent contractors, there are even other agencies outside these that you need to pay attention to.
To help you understand how different agencies view the difference between independent contractors and employees, we have created a handy infographic that shows which factors four different agencies look at. By simply looking at this infographic, you will see that this issue is looked at quite differently by the DOL, IRS, INS, and Workers’ Comp.
It is important that you understand the differences in how these agencies determine independent contractor status so that you can remain compliant across the board.