One of my recently laid-off employees needed to finish a critical part of our ongoing project. Can I bring him back as a 1099 independent contractor?
This had been a normal occurrence in the industry brought about by the economic downturn. Companies are forced to lay off employees even those who carry valuable knowledge and skills necessary in delivering successful projects. But doing so only increases your risks of non-compliance that outweigh the benefits of bringing them back as independent contractors. These people will more likely fail the IRS’ 20-Question Test and expose your company to potential tax audits with that contractor being reclassified as your W-2 Temporary Employee. However, you may still have those former employees to finish remaining tasks and comply with the IRS and state requirements at the same time through TPX Global® Contractor Payrolling Services being the Employer-Of-Record.
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