The IRS and Department of Labor’s Focus on Worker Classification
Intentionally or not, many workers in the United States are classified as independent contractors (IC). In classifying a worker as an IC instead of an employee, putative employers can eliminate the following expenses:
The employer’s share of Social Security (FICA) and Medicare taxes
Overtime and minimum wage payments
Employee health insurance premiums
Employee retirement benefits, vacation, holiday, and sick pay
Other employee fringe benefits, such as stock options
Federal and state unemployment compensation taxes (FUTA and SUTA)
