The IRS and U.S Department of Labor are more vigilant than ever before about enforcing proper employee classification. That means, as an event service business employing a contingent workforce, it is absolutely critical for you to correctly categorize your crew members as either independent contractors (1099s) or part-time employees (W-2s) in order to adhere to regulatory guidelines and avoid penalties. According to the U.S. Department of Labor, “misclassification” refers to a worker who is an employee under the law, but the individual is inaccurately classified as something other than an employee.
In the past, little attention was paid to the employee classification – companies could decide to classify their crew based on whatever was best for their business and/or what their crew members wanted to be. However, as the contingent workforce grew and as freelancers have became a larger part of the overall workforce, regulations and governmental scrutiny has increased substantially.
Event businesses are now highly focused on figuring out what proper employee classification means to them and what is most beneficial to both the organization and their crew members. Nowadays, more companies are hiring W-2 crews in order to avoid employee misclassification concerns. According to our recent survey, 75% of event service companies hired W-2s in 2016, up from 47% the year before. In fact, hiring a W-2 crew can also be good for business and provide great benefits to your crew.
Learn more about the employee misclassification conundrum and determine what assumptions are true vs. false when it comes to properly classifying your crew as either W-2 or 1099 in our new infographic!