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View Full Version : 1099 vs. Employee Fines?


nmc9264
Aug 21, 2013, 09:49 PM
What are the fines, imposed, when it's determined that an employee is legally an employee and not a 1099 contractor in the state of Michigan?

ScottGem
Aug 22, 2013, 03:22 AM
Since this is a federal issue, its not governed by state law:

What Can Happen If a Worker is Improperly Classified?

If you improperly classify an employee as an independent contractor, you can be liable for:

additional state and federal income taxes
unemployment insurance penalties
workers compensation penalties
lawsuits by workers for unpaid wages
criminal fraud
Frankfurt Kurnit Klein & Selz PC (http://fkks.com/article.asp?articleID=192)

There are no set fines, its handled on a case by case basis.

joypulv
Aug 22, 2013, 04:29 AM
If you are the employer, your best bet is to hire an ex-IRS agent to help you out of the mess without paying whopping penalties. There are many of them who specialize in this subject.