Making sure that W-2 and 1099 Independent Contractors are correctly classified is important to all businesses, including churches.
The US Department of Labor notes that the misclassification of workers as 1099 Independent Contractors vs W-2 employees is one of the most common errors seen today and can risk exposing employers to fines, penalties, and back pay.
Understanding the differences is key in determining if a worker can correctly be classified as an Independent Contractor or not. The requirements to be correctly classified as an Independent Contractor (1099) are quite different than W-2 employees.
Related, having a solid Independent Contractor Agreement in place for all 1099’s that is executed by both parties is also essential.
MRS Insurance Services Director