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Risks of misclassifying your 1099 workers

Is the person you just hired a 1099 contractor or an employee? Making a false assumption could be costly. In California, there is a fine line separating these two categories of workers and significant penalties for misclassification.  Here are some of the consequences...

Employees Vs. Independent Contractors: How Should you Classify?

Have you stopped to ask yourself if you are filing the wrong tax form for your employees? Form W-2’s for each employee are due on January 31 , 2017. …

10 Myths of Worker Misclassification (Independent Contractor or Employee)

As the deadline to file your W-2s for employees approaches at the end of January 2017, many business owners find themselves wondering …

F.A.Q.

Frequently Asked Questions

If I have a written contract with my 1099 independent contractor, does the contract guarantee my worker will not be classified as employees?

No.  Having a written agreement for services is helpful, but does not determine a worker’s status.  California law recently changed to require a “hirer” to satisfy three elements, which include showing a company does not have control and direction over the worker for the performance of the work.  A hirer must also show the contractor performs work that is “outside the usual course” of the hiring company’s business.  Lastly, the worker must be “customarily engaged” in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

If I currently hire 1099 independent contractors, should I order a Clear1099 report for each worker or only for new workers?

We recommend ordering a Clear1099 report for each worker.  Each worker is unique and may have completely different information from other workers, even those that may provide the same type of services.

Can I review my report with a Clear1099 representative?

Yes.  Some plans include a scheduled phone call with a Clear1099 representative to review your report and provide insights about your data.  We do not provide legal or technical advice.  Clear1099 is a business reporting company that provides useful business information about your 1099 independent contractors to help you make a make better decision.  Our reports are used by professionals to identify facts pertinent to a worker classification.

What is a Clear1099 report and how can I use the report?

Each Clear1099 report contains information to help determine the proper status of a worker who provides services.  Workers can be classified as 1099 independent contractors or employees.  The report includes information to help identify facts that support a legitimate independent contractor, such as verification of EIN, business location, business entity review, FBN review, website and social media data, professional license, and tax license, and helpful insights about your data. 

 

Ideally, you will obtain a report for each contractor before you engage that worker.  Most companies who have existing 1099 independent contractors can also obtain a report to validate their workers.  Some workers may have been valid 1099 independent contractors in the past, yet, they may no longer qualify as independent contractors today.  Getting updated reports allows businesses to be informed of changes in their workers’ status and confirm their contractors continue to have the proper requirements to be 1099 independent contractors.

 

Our reports are used by other professionals such as CPAs, Human Resources professionals and Chief Financial Officers to make better decisions.

 

Our reports are also used by professionals who may need to respond to a request from a government agency about their workers.

Who is Clear1099 intended for?

A Clear1099 report is intended for anyone who hires independent contractors or is unsure about the status of an existing worker.  You may use a Clear1099 report to verify the legitimacy of a worker’s trade or business and ensure they remain in compliance.

How long does it take to get a report once I place my order?

Generally, we need between 1 to 2 business days (depending on the number of contractors you have) to provide a report.  Additional time may be needed to prepare a report based on the complexity of the information and the number of contractors you have.

Is there a maximum number of 1099 independent contractor reports I can order?

We offer three pricing plans, each having a different maximum number of contractors.  We do offer an enterprise level plan for companies with larger requirements.

What is the minimum amount of information I need to order a report?

You must have all of the following information to order a report:

  • individual’s name or business name
  • employer identification number (EIN) or social security number (SSN)
  • business address or home address

It is generally helpful to also have information on the type of service(s) provided by each worker.

Before ordering your report, you must also verify the information is not being used in a hiring decision for employment.

CA Business Owners Trust CLEAR1099

Customer Support for the DIY-er

Take care of teh data gathering on your own terms and let the team at CLEAR1099 support you in your process. 

Plans for every business

From the small business with 2 or 3 1099 contractors to corporate enterprises, we partner with companies of all sizes to get them the information they need to make informed decisions on their worker classification.