Businesses with multiple 1099s may have inadvertently opened themselves up to EDD audit or investigation. AB-5, the “Gig Work Bill” was signed into law by Gov. Gavin Newsom and went into effect January 1, 2020. The law makes the criteria for classifying a 1099 worker much more stringent. Penalties can be dramatically lessened by self-correcting this close to your tax filing date.
Don’t wait for EDD to call or come to your business, you can do your own investigation to ensure your contractors have legitimate businesses. We recommend getting a Verify1099 report The DIY tool allows you to run reports on 1099 contractors to verify their business license and EIN among other factors.
Armed with the right information you can make an informed decision. To dig deeper, download our EBOOK on AB-5 complete with Case Studies of the black and white and grey areas of the new 1099 contractor classification rules.
The team at Verify1099 is here to support your business as you decide whether to re-classify your 1099 workers, determine whether they are exempt under the Gig Work bill and then, ensure that they meet the older Borello 13 point test put forth before the AB-5 Bill went into law.