Releases

In recent years, state and federal agencies have vigorously investigated and penalized companies that improperly classify workers as consultants or independent contractors rather than employees in an effort to avoid mandates such as unemployment, worker's compensation and overtime. Now the IRS has launched the Voluntary Classification Settlement Program, allowing employers to re-classify some workers as employees in exchange for significantly reduced tax liability. “The program provides partial relief for eligible companies in allowing them to pay only 10 percent of the employment tax liability that would otherwise have been due in prior years,” says Todd Lowther of the Houston office of Thompson & Knight. “This essentially means that a business can ‘turn itself in’ to the IRS before being audited and eliminate the risk of IRS penalties for misclassifying employees.” Lowther notes that companies need to consider any potential liability under state employment law before pursuing coverage under the federal program. For more information, contact Barry Pound at 800-559-4534 or barry@androvett.com.