Many small businesses struggle with properly classifying workers, often misclassifying W2 employees as 1099 contractors. This episode of Kaizen Time, part of the Blood, Sweat, and Business podcast, explores the costly consequences of this misclassification, particularly within industries like construction, restaurants, bars, and retail. The discussion covers the distinctions between legitimate 1099 contractors, such as specialized service providers with their own businesses, and employees who should be classified as W2. The episode delves into the reasons businesses might misclassify employees, like attempting to avoid paying benefits, unemployment tax, or workers' compensation, and how these perceived cost savings can lead to significant fines, lawsuits, and increased scrutiny from regulatory agencies. This episode offers valuable financial advice for small business owners, emphasizing the importance of accurate classification for maintaining compliance and avoiding legal and financial repercussions. Learn more about proper accounting services and how to ensure your business practices are sound.
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🎙️ Kaizen Time is part of the Blood, Sweat & Business podcast series by Kaizen CPAs + Advisors. We help small business owners make smarter financial decisions—without the fluff.
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