Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Cybersecurity
    • Veterans Verification Video
    • GTPAC Community
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Why the U.S. government hates the idea of independent contractors

June 6, 2017 By Andrew Smith

Say your business is doing well, and you to need to hire some extra workers.

But you may be terrified of all the obligations that go along with adding a person who must be treated as an employee. So you would prefer to add someone who can rightly be treated as an independent contractor. Good idea!

Unfortunately, the government hates the idea of independent contractors, and the IRS has skirmished with businesses for decades about the so-called worker classification issue. Here’s what you need to know about the subject.

Worker classification matters

When a worker is classified as an employee of your business, you generally must withhold federal income tax and the employee’s share of Social Security and Medicare taxes from the worker’s wages. Your business must then pay the employer’s share of Social Security and Medicare taxes, pay federal unemployment tax, file federal payroll tax returns, and follow lots of burdensome IRS and Labor Department rules. You may also get socked with state and local unemployment and worker compensation taxes and have to comply with even more rules and regulations. Dealing with all this stuff can cost thousands of extra dollars a year for each employee.

On the other hand, independent contractor status is beneficial to a business because you don’t have to worry about employment tax issues, and you don’t have to provide expensive fringe benefits like health insurance, retirement plan contributions, and paid vacations.

Keep reading this article at: http://www.marketwatch.com/story/why-the-us-government-hates-the-idea-of-independent-contractors-2017-05-23

Filed Under: Contracting Tips Tagged With: DOL, Form SS-8, independent contractor, IRS, worker classification

Recent Posts

  • DLA hosting event March 10th with special emphasis on Women-Owned Small Businesses
  • Navy Office of Small Business Programs holding three events in March
  • SBA hosting conversations with contracting officers forum Feb. 25th
  • Final rule, formal training on CMMC could hit this summer
  • Non-compete clauses in government contracting: a case study in enforceability

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

Final rule, formal training on CMMC could hit this summer

COFC: “Rule of two” must be analyzed before “any” acquisition

DOD’s cybersecurity certification requirements to appear in DHS contracts

Congressional Research Service publishes updated report on SBA’s 8(a) program

Congressional Research Service publishes new report on SBA’s HUBZone program

Read More

Contracting Tips

Non-compete clauses in government contracting: a case study in enforceability

NDAA for fiscal year 2021 includes numerous provisions impacting government contractors

Beware of the automated email response

Complying with the government’s restrictions on foreign telecommunications equipment

Construction claims in the COVID era: lessons learned and best practices

Read More

GTPAC News

DLA hosting event March 10th with special emphasis on Women-Owned Small Businesses

Navy Office of Small Business Programs holding three events in March

SBA hosting conversations with contracting officers forum Feb. 25th

USACE seeks vaccination center construction support

GTPAC updates cybersecurity resource page to include CMMC guidance

Read More

Georgia Tech News

Collective worm and robot “blobs” protect individuals, swarm together

The Partnership for Inclusive Innovation is now accepting applications for pilot programs

Georgia Tech will help manage DOE’s Savannah River National Laboratory

Dr. Abdallah testifies on U.S. competitiveness, research, STEM pipeline at Congressional hearing

Georgia Tech’s Technology Square Phase III to include George Tower

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2021 · Georgia Tech - Enterprise Innovation Institute