Job Change from W2 to 1099...Are there issues?

[ddeveaux]

What is the name of your state (only U.S. law)? NY

We have had part time (W2) employees doing an Analyst job for us for 3 yrs. The job has always qualified to hire the persons as contractors (1099) but we did not status them this way to give ourselves a competitive advantage. I'm very familiar with the IRS checklist for the difference and am positive these qualify as 1099 persons.

My question is that since we have been paying people as W2 for this from 2006-2009, might we run into a problem if in 2010 we hire new persons for this job as contractors? Can we change status of existing people doing this to contractors?

Thanks!

 

[pattytx]

Can you change them? Yes. Should you change them? If you want to violate the law, go right ahead.

 

[Antigone*]

What is the name of your state (only U.S. law)? NY

We have had part time (W2) employees doing an Analyst job for us for 3 yrs. The job has always qualified to hire the persons as contractors (1099) but we did not status them this way to give ourselves a competitive advantage. I'm very familiar with the IRS checklist for the difference and am positive these qualify as 1099 persons.

My question is that since we have been paying people as W2 for this from 2006-2009, might we run into a problem if in 2010 we hire new persons for this job as contractors? Can we change status of existing people doing this to contractors?

Thanks!

The analysts that are working for you now, do they use their own equipment and supplies? Do they have a set work schedule? Let's start there?

 

[pattytx]

Can you change them? Yes. Should you change them? If you want to violate the law, go right ahead.

Sorry, I misread your original statement that you feel comfortable treating them as ICs. Why don't you do an SS-8 for the position and get the IRS' opinion?

 

[ddeveaux]

Sorry, I misread your original statement that you feel comfortable treating them as ICs. Why don't you do an SS-8 for the position and get the IRS' opinion?

Thank you for messages. We got an opinion from State of NY 2 yrs ago and they agreed they are ICs. My question isn't really if they are ICs as I know they are and if I complete an SS-8 I'll get an ok, which yes I would do if it looks like makes sense. (Don't use own equipment, no set hours, no set assignments, accepts assignments as they wish, etc.)

My concern/query is whether, after treating these people as W2 for 2-3 yrs and now, same job, I change it, whether there is some implicit acceptance of the positions as W2 even though they meet all the IC criteria? So IRS says "Yeah, you are right they meet the IC criteria, but you lose that option when you go ahead and treat them as EEs for some period of time."

 

[pattytx]

Not to my knowledge, no.