Compliance Alert: Worker Classification Advisory
Keeping You Compliant With The Latest Government Regulations!
Prestige is working diligently in 2013 to ensure our clients stay in compliance with all the new laws and regulations affecting small to medium size businesses.
Voluntary Worker Classification Settlement Program
The IRS has announced revisions to the Voluntary Classification Settlement Program (VCSP), which provides partial relief from federal employment tax penalties for eligible employers that agree to prospectively treat misclassified workers as employees. The IRS has announced a temporary expansion of eligibility for the program that will be available through June 30, 2013.
- The program applies to employers that are currently treating their workers (or a class of workers) as independent contractors and want to prospectively treat the workers as employees.
- An employer must have consistently treated the workers as nonemployees, and must have filed all required Forms 1099-MISC, consistent with nonemployee treatment, for the previous three years with respect to the workers to be reclassified.
- The employer cannot currently be under an employment tax audit by the IRS, the U.S. Department of Labor, or a state government agency.
What Prestige Is Doing To Keep You Compliant!
Prestige Employee Administrators, Inc. is assisting clients in determining whether individuals providing services should be classified as employees or independent contractors.
- Prestige is sending out an email to all clients as a reminder that improper classification may result in clients being held liable for employment taxes including income, Social Security, Medicare, and unemployment taxes for that worker.
- To help keep clients in compliance, Prestige is sending out the IRS 20-Point Checklist to assist in determining how to classify all persons providing service to their business.
- Prestige is also offering their assistance to clients in completing Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
Prestige is working hard to help clients classify their employees correctly and prevent any future penalties. The IRS’s 20-Point Checklist is a useful tool that can be used to determine how much control the employer has over the worker’s behavior and finances. In addition, if a client feels they have misclassified a worker, Prestige will help correct the situation by making clients aware of the new Voluntary Classification Settlement Program. Prestige is committed to keeping our clients compliant in 2013 and will continue to send compliance alerts.