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Status QuotientHow to determine whether to classify workers as employees or independent contractors.
ByJulie Cook•
Opinions expressed by Entrepreneur contributors are their own.
The question of whether to classify workers as independentcontractors or employees continues to haunt most small-businessowners. But entrepreneurs aren't the only ones plagued by thisshady issue; because of misclassifications, the IRS loses more than$38 billion in employment taxes each year.
The IRS also says that, besides the employment tax loss, many ofthese misclassified workers aren't paying income taxes. Theagency's statistics show that when the business fails to filewith the IRS, less than 30 percent of the workers report theircompensation.
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