We are pleased to release our latest podcast, ABCast Episode 8 – Employee Misclassification and EDD Audits. Jan and Neil discuss the impact of the Supreme Court decision in Dynamex and the resulting issues associated with independent contractors, 1099 workers and the new “A-B-C Test” established by the Court’s decision.
In this broad ranging discussion, ABCast Episode 8 – Employee Misclassification and EDD Audits discusses the role of California’s Powerful Employment Development Department or EDD and the taxes it is responsible for collecting and auditing. The podcast also reviews a hot topic and something which is becoming much more common – an EDD verification audit. While the EDD reviews and audits every California employer’s payroll every three years the EDD has an added incentive to review the classification of workers. The new presumption in California is that every worker is classified as an employee, and if not, it is the legal burden of the provider of work to prove why the worker is not to be classified as an employee.
This change has had a profound affect upon many companies here in San Diego and across California.
In ABCast Episode 8 – Employee Misclassification and EDD Audits Jan discusses the multitude of ways in which the EDD will become aware of potential misclassification, triggering an audit. It may be as simple as a 1099 worker who is laid off attempting to file for unemployment, or it may be affected by the number of 1099s a company issues each year. Jan discusses the changes in the changes between the old protocols for classifying independent contractors (21 of them) and the new test of whether or not a worker basically contributes to the revenue stream of the company.
The penalties for misclassification of employees or a mistake in the proper collection and submission of payroll-related taxes can be quite severe.
We invite you to listen to ABCast Episode 8 – Employee Misclassification and EDD Audits and hope you enjoy learning more about the tax services provided by Janathan L. Allen, APC as a part of the integrated offerings of Allen Barron, Inc. We invite you to meet with experienced San Diego tax attorney Janathan Allen by contacting Allen Barron, or call 866-631-3470 to schedule a free consultation.
Read a Transcript of Episode 8 – Misclassification EDD Audits
