Probably the most common misunderstandings employers have is how to properly classify workers as either employees or independent contractors. The largest cause of confusion and errors comes when someone has a friend or industry peer that miss-classifies their workers. Even though your friend has never had a problem, does not mean the IRS or other entity that could investigate your business would agree with your friend or be soft on miss-classification penalties!
Don’t make this mistake, the IRS has provided in depth documentation to educate the public on their position and the costly risks of doing it wrong. Below are a few IRS web-pages to help you understand the differences and help you avoid making this mistake in your business: