HR Workforce Solutions
By Nonprofits, For Nonprofits
Performing small business payroll can be both difficult and critical to effectively avoiding the all-too-tricky claim type, “independent contractor vs employee.”
Nonprofit employers must take the time to learn the distinguishing characteristics of an employee of an organization and an independent contractor, who are self-employed individuals. If and when you make a mistake when classifying these two worker categories, not only will this mix-up lead to high penalties, but you may have to outsource for payroll assistance—costing your organization both valuable time and money.
In general, here’s how you differentiate the two workers:
To avoid overpayments, rework for the employer and state, and potential investigations from the IRS, employers should use either the ABC Test or the Common Law Test to determine whether a worker is an employee or independent contractor.
Both tests are designed to readily identify the worker-employer relationship, focusing on how much control the organization has over a worker and the work accomplished. Check out both the ABC Test and Common Law Test here to ensure your nonprofit’s compliance.
This article was adapted from Equifax Workforce Solutions, UST’s dedicated unemployment claims administrator.
UST members receive exclusive access to an online claims dashboard, e-filing capabilities, a state-specific claims representative and 100% representation at unemployment claims hearings. To find out if your nonprofit qualifies for the UST program, fill out a free Savings Evaluation today or call us at 888-249-4788.
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Your use of this site and the provision of basic information constitute your consent for UST to use the information supplied.
UST may collect generic information about overall website traffic, and use other analytical information and tools to help us improve our website and provide the best possible information and service. As you browse UST’s website, cookies may also be placed on your computer so that we can better understand what information our visitors are most interested in, and to help direct you to other relevant information. These cookies do not collect personal information such as your name, email, postal address or phone number. To opt out of some of these cookies, click here. If you are a Twitter user, and prefer not to have Twitter ad content tailored to you, learn more here.
Further, our website may contain links to other sites. Anytime you connect to another website, their respective privacy policy will apply and UST is not responsible for the privacy practices of others.
This Privacy Policy and the Terms of Use for our site is subject to change.
