When staffing your next major event, product launch, demonstration, retail assisted sales , tradeshow or other live brand experience, the last problem you want is legal liability. If the company you contract doesn’t hire employees under a W2 arrangement, and hires 1099 independent contractors – you are at risk.
Updates for Former J. Williams Agency Clients
While the “W2 vs 1099” decision has long been voluntary, this is no longer the case. Labor regulations in states such as California make W2 tax status for event staffing a requirement, and other states are soon to follow, so there is no reason to wait to be fully compliant.
At Fusion, the “human” element of business must function as seamlessly as the other aspects. The Fusion brand voluntarily transferred its talent to W2 status seven years ago.
As we bring J. Williams Agency into the Fusion brand,
we are transitioning that talent pool to W2-status nationwide by January 2021.
Putting your organization at risk for litigation and other related issues is simply not an option for us. The conversion to W2 is the future for our industry. We want our clients to be at ease knowing we handle all staffing operations and compliance internally, allowing you to focus fully on your business objectives.
Why Tax Status Matters
Since the work done is often short-term, 1099 status seems preferable. It results in cost-savings to the hiring company on taxes and reduces fees paid to staffing agencies.
There are inherent risks associated with choosing a 1099 staffing agency.
According to the IRS, income filed under 1099 must be performed as an independent contractor. By definition, “an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” Source
If a contractor is working in a capacity that resembles what your normal employees would do, an argument can be made that an employer/employee relationship exists and this is where problems arise for unsuspecting companies opening a conversation regarding eligibility for benefits, higher wages, and even workplace injury compensation.
As you can see, using a 1099 status staffing company leaves your organization open to litigation if issues arise.
How to Protect Your Company
While the grey areas are significant, protecting your organization is fairly simple. Work with staffing agencies that use W2 status workers to ensure that the employment relationship (and liability) remains between the staffing agency and its respective workers.
As a client to the staffing agency, you have no liability or obligation to handle disputes relating to employment. These concerns remain with the agency.
While converting from 1099 to W2 increases rates in the short-term, it is well worth the investment to be compliant long-term.
Fusion is your seamless outsourcing resource for your staffing needs. You get the highly-qualified talent you need, when you need them, with a process free of uncertainty and legal liability.
Own the room at your next event, function, tradeshow or product launch with Fusion!