The determination of whether a worker is an employee or independent contractor is the responsibility of businesses.
Denver, Colorado (PRWEB) May 13, 2015
The construction industry is in full force in Colorado with more than 29,000 new building permits (a 7.5% increase from one year ago) over the past year, with a valuation of $6.5 billion. That, according to the Colorado Secretary of State's Quarterly Business and Economic Indicators Report. The construction industry is prone to worker misclassification and that has Avitus Group stepping up to educate Colorado employers on independent contractor vs. employee classification.
“The determination of whether a worker is an employee or independent contractor is the responsibility of businesses,” says Denver-based Avitus Group Human Resource and Risk Management Consultant Dawn Wilson. “This is an issue many businesses don’t ask about, but should as IRS penalties for misclassifications can be steep.”
In May 2015, Avitus Group launched a worker classification online Q & A forum, inviting Colorado businesses to submit worker classification scenarios/questions to HR professionals located in Denver. The Q & A forum includes a quick yes/no worker classification guide that is designed to help a business determine whether a worker is an employee or an independent contractor. The guide takes a business owner/manager through the top 20 questions, from the IRS, that determine the worker’s correct classification. The guide also provides a case study from a court case involving workers on a horse farm, as the agriculture industry is also prone to worker misclassification. Agriculture is a $41 billion dollar industry in Colorado, employing nearly 173,000 people, according to the Colorado Department of Agriculture.
Avitus Group human resource experts say if the Internal Revenue Service (IRS) challenges the classification made by the business, the burden of proof is on the taxpayer (business). Misclassifications may result in substantial monetary penalties, payment of back taxes, issues with wage and hour laws and the payment and penalties for unpaid workers compensation insurance premiums. Additionally, criminal actions may be brought if misclassifications are determined to be intentional and/or fraudulent.
“Key factors the IRS evaluates are financial control, type of relationship and behavioral control. For example, does the business have the right to direct and control how the worker does the task for which they are hired? What is the level of instruction that the business gives the worker? The more defined these instructions are, the more likely the worker is an employee. In a farming scenario, these instructions could include, when and where to do the work, what tools or equipment to use and where to purchase supplies and services,” says Wilson.
Avitus Group’s online Q & A forum is available to all businesses. Avitus Group is a worldwide company based out of Billings, Montana. Avitus Group simplifies, strengthens and grows businesses by providing 'back office' support. Things like bookkeeping, taxes, payroll, IT, marketing and much more. When businesses use Avitus Group, all of the necessary yet burdensome functions of the business become Avitus Group's responsibility so the business can focus on what they do best. Avitus Group serves clients nationwide through regional office locations from coast to coast. The company also serves international clients through partner locations in Europe, Canada, China, England, India, Japan and Singapore.