Seasonal / Temporary Employees Can’t Be Paid as 1099 Independent Contractors in Business and at Work

Another consideration as employers begin to hire seasonal workers for the summer (aside from utilizing the New York state PFL waiver for seasonal employees) is to pay seasonal workers as employees (W-2) not as independent contractors (1099).

It’s a common mistake, especially for organizations with no existing / historic internal human resources function. Nevertheless, many employers who add seasonal workers are under the mistaken impression that it’s acceptable to pay them as independent contractors. The IRS, and especially NYS, have numerous requirements that clearly define independent contractors – who essentially must be business owners with multiple clients, among other very specific / pointed criteria.

In reality, federal and NYS regulators do not take kindly to employers who choose to pay seasonal workers as 1099 contractors, because to do so is to avoid paying both state and federal payroll taxes, as well as overtime, workers’ compensation and unemployment insurance.

Are you paying your seasonal workers as W-2 employees (not as 1099 independent contractors) in business and at work?