OUCH! Talk about painting yourself into a corner…a $111K corner to be exact!

I have to thank the Phoenix Business Journal for throwing this article onto my lap recently so here it goes…thank you Business Journal! 

The article I am referring to talks about a local Phoenix painting company that apparently has some issues paying their employees their due overtime.  The end result was the U.S. Department of Labor order this company to pay back 192 employees their overtime totaling almost $49,000.  Oh, one more small detail…they also found the company to be "willfully misclassifying" their employees and that carried a hefty fine of $62,480 according to the Department of Labor.

This article appears to showcase what I like to view as a snowball effect once the U.S. Department of Labor launches an investigation on your business.  In this case, I would be willing to bet my fellow blogger Harry's next paycheck that the original investigation was done initially on their overtime violations. As the investigation continued and the business was put on the hot seat, more and more skeletons started to reveal themselves.  In this case, the skeletons just happened to be someone "willfully misclassifying" their employees according to the Department of Labor. A previous blog I did offered help for companies who may have unintentionally misclassified their employees. 

Now we get to see what happens first hand when you don't play by Uncle Sam's rules.

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Posted November 8th, 2007 by Vincent - Posted in Human Resources, IRS, Taxes | | 0 Comments

Independent Contractor or Employee? It’s NOT your choice…

Lately I have seen a recurring theme in the business community here in Arizona. Employers are under the impression that they have the freedom to “choose” if a person providing services for them is in fact an employee or an independent contractor. In many cases, an employer will designate a service provider as an independant contractor to avoid paying payroll taxes, workers’ compensation insurance and other obligations. Some do this intentionally to avoid these taxes, which is wrong, and others simply do not know and understand the law enough to comply.

For those that may be questioning themselves and wondering if they are doing this their own way or the right way, here is a link brought to you by your favorite Uncle Sam.

For those that may have been unclear or have made a mistake in the misclassifcation can get help. Just be advised that you are still responsible for the taxes that were supposed to be paid. More help is available here…

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Posted October 24th, 2007 by Vincent - Posted in IRS, Taxes | | 1 Comments