Overview
Properly classifying workers as employees or independent contractors is critical for compliance with federal and state regulations. Misclassification can result in significant penalties, audits, and legal risks for organizations.
This course provides a comprehensive overview of worker classification rules, including the IRS three-factor test (behavioral, financial, and relationship control) and federal wage and hour regulations updated in March 2026. Participants will also learn how to use IRS Form SS-8 and understand the ABC test applied at the state level.
Areas Covered
· What classifications of workers are permitted under IRS Rules
· What is the common law rule and how is it used to determine worker status
· What are the three factors the IRS uses to determine worker status and how to apply them correctly
· How the FLSA rules differ from the IRS rules and why you must follow both even as the FLSA regs are being updated in 2026
· How does the state trump both the IRS and the FLSA on determining independent contractor status with the ABC test for SUI
· What are the latest agreements or programs being used by the IRS, DOL and the states to “find” misclassified employees
· Using the Form SS-8 to your advantage to determine worker status
· Who gets a W-2 and who gets a 1099 and why it should never be the same worker
· Find out how easily a 1099 audit can be triggered and why the chances of getting one are on the rise
· What are the penalties for misclassifying an employee as an independent contractor and who assesses them. It is not just the IRS you have to worry about.
· You found out you have a misclassified employee—now what?
