Do you pay any of your campground staff as independent contractors? This can quickly become a big problem if the IRS ever takes a look at it.
How do I classify may campground workers as employees or independent contractors?
- Who has financial control of the job?
- Who can exercise behavioral control over how the worker performs the specific task?
- And how do the parties themselves treat the relationship?
When reviewing the checklist, keep in mind that the IRS will make its decision based on the whole picture, not just a single factor.
How will they know that I misclassified campground employees as independent contractors?
What are the consequences for misclassifying campground workers?
- Requirement to pay the back-taxes and interest in employee’s wages (that should have been withheld)
- FICA taxes that were not withheld originally (along with penalties and interest for remitting them late)
- Reimbursement of wages that the business should have paid the worker (if the correct wage and overtime rules had been applied), and any penalty they incur as a result of failing to follow those laws.
- Payment of penalties and benefits for worker’s compensation insurance