IRS independent worker crackdown could cost BSCs
February 22, 2010
CHICAGO — Aggressive investigations by the Internal Revenue Service (IRS) and state tax officials into the misclassification of employees as independent contractors could cost JanSan and maintenance employers millions, according to a press release.
According to the release, a February 18 New York Times article reported the crackdown, stating that employers who misclassify independent contractors avoid worker''s compensation, unemployment insurance, social security and other expenses, as well as being able to charge less for their services because of these savings.
AlturaSolutions Communications, a JanSan industry consulting firm, is warning building service contractors (BSCs) of the crackdown, which could cost businesses millions in fines and back payments and could open them up to lawsuits from injured workers, the release stated.
The Times reported a case in California where 300 janitors at two companies were misclassified, resulting in a $13 million judgment against the BSCs, the release noted.