New York SBDC Research Network

Yesterday, CNN Money ran a story called " Auditors Crack Down on 'Independent Contractors' ," echoing a similar story that appeared in the New York Times back in February. We've written before on how the IRS differentiates when a person is an employee, or when he or she is considered to be a contractor. Check out the link in that post to an IRS document that spells out the difference between the two. Companies who utilize independent contractors are not obliged to pay unemployment insurance, or worker's comp, or Social Security taxes, or Medicare taxes . . . As these articles mention, at a time where the majority of state unemployment insurance coffers are empty, great interest in auditing companies with significant utilization of contractors has revived. Seven billion dollars is seven billion dollars, which is what the IRS is hoping to generate by conducting these reviews throughout the country. If your business is in the habit of using contractors, mak...

Rick Leibowitz, director of our North Country SBDC, recently shared this with me: http://www.labor.state.ny.us/ui/dande/sharedwork1.shtm This looks to be something that is worth investigating by some of our clients. It describes a NYS Department of Labor program that encourages employers to consider shifting staff to a four-day work week, with the employee earning qualified unemployment wages for the fifth day. It argues that rather than making wholesale layoffs, a company might be able to cope during a down period by essentially reducing its payroll by 20% for a given period of time. The theory continues that, once business improves, a company isn't faced with the costs of hiring and training additional staff. Has anyone had any experience with this, or had clients who've given it a try?