..............................................................................................................................................................................................................

Is the status of your employees and consultants in compliance with the Massachusetts Independent Contractor Law?

Beware! Due to deficits in Massachusetts unemployment reserves, the Massachusetts Division of Unemployment (DUA) has become extremely aggressive about collecting unreported wages by reclassifying consultants to employees. The IRS is also on the same war path.

Mass. DUA has changed its interview and data collection process. Now, when a person files an unemployment claim, they are required to list every source of income, whether part-time, consulting, or wages. The DUA is contacting companies, agencies and nonprofits who paid consultants and are launching audits in an attempt to collect unemployment going back 3 years for every person that they consider to have been improperly classified as consultants.

The law creates a presumption that a work arrangement is an employer-employee relationship unless the employer can establish that the following three factors are present:

(1) that the worker is free from its control and direction in performing the service, both under a contract for the performance of service and in fact;  

(2) that the service provided by the worker is outside the employer's usual course of business; and  

(3) that the worker is customarily engaged in an independent trade, occupation, profession or business of the same nature as that involved in the service performed. 

Failure to comply with the law carries both civil and criminal penalties and a fine of up to $25,000.

Helpful tip: Massachusetts Independent Contractor Law explained on a segment from WGBH.

http://www.wgbh.org/programs/Greater-Boston-11/episodes/-16797      

At Smith, Sullivan & Company, PC, our dedicated professionals listen to your auditing and accounting, tax preparation, and small business questions and offer personalized solutions to you and your family, your small businesses or nonprofit, all at a reasonable price.

Our accounting team has extensive experience. We understand your frustration when you tell us that you've paid top dollar for accounting services - only to learn that there's a junior-level person working on your engagement. Or, that it's mid-March and your accountant isn't returning emails or phone calls because your files been put on the back burner so that they can focus on the tax return crunch. At Smith, Sullivan & Company, PC we only send senior-level accountants into the field and they remain accessible to you throughout the year. A dedicated team is assigned year-round specifically to our nonprofit clients, so that deadlines are met on time and your questions are never ignored.

Established in 1993, Smith, Sullivan & Company, PC is for you if you value communication, one-on-one attention, and "hands-on" expertise from experienced senior-level accountants. Whether you have a project to bid on now, or in the near future, contact us to schedule an introductory meeting, we'd love to meet you!