From QuickBoosk DocStoc —
It’s important to correctly classify your employees and contractors accordingly. Not doing so can result in owing employment taxes to the IRS. Misclassified workers who believe they should be classified as employees can also file a Social Security Tax Form (Form 8919) that will calculate what their employer did not hold back for Medicare or social security and credit it to their social security record.
Additionally, your reputation as a fair or good employer might receive negative attention if you don’t offer your employees the proper classification and, as a result, fail to offer other benefits like health insurance, paid time off and life insurance.
The success of your business could hinge on good working relationships with your employees and independent contractors in your area. Be sure to maintain these relationships by offering decent wages, good benefits and challenging work. That way, anyone who works for you, whether contractor or not, will view the relationship as mutually beneficial and want to continue helping you succeed.
Read the full story at 5 Differences Between a Contractor and an Employee.