Re: Employees Misclassified as Independent Contractors
I wouldn't blame the employees if I were you, the IRS has certain ways to find out when this happens. I know I received a long questionaire regarding a former employer who pulled this stunt on me and any other employee with whom they could get away with it.
There are very specific rules as to who is considered an employee, and who is an independent contractor. You have to follow those rules. They were established by the government to protect people from being taken advantage of.
If you are going to call people independent contractors, you really need to know what one is.
Very basically, if an employee has to work at a certain place during certain hours, uses your equipment, is under an obligation to train under your rules, and doesn't spend their own money/resources to get the job done, they are probably an employee. This is an extremely basic overview of it though.
According to: http://jobsearchtech.about.com/od/la...aa121800_2.htm
"Although all agencies concerned are always on the lookout for violators, the IRS takes the lead here too, and aggressively so. If it finds a company guilty of misclassifying its workers, the IRS might require the company to pay all back withholding taxes plus interest, even if the misclassified independent contractors have already paid their taxes. The IRS might also levy huge fines and press criminal charges against the company officials. Once the IRS moves in, it opens the doors for the other agencies to collect their due. If there's anything left, the misclassified independent contractors might collect, too. Misclassified independent contractors have successfully sued for unemployment insurance, stock options, overtime pay, retirement benefits, profit sharing, disability payments, workers' compensation and more, in so-called "permatemps" and related lawsuits."
Unless a source is cited, anything posted here by me is only my opinion, and is not meant as legal advice.