Uber drivers aren’t the only ones concerned about the new California law regarding independent contractors. Many trade groups and charities are managed by independent contractors. Unless they are a corporation, you are now testing the law. Of course, you may put them on a payroll and pay employee taxes, which is what California is yearning for. But that increases their cost to you.
Many trade associations and charitable groups pay a consistent monthly amount to someone charged with handling administrative and member benefits or donor relations. That regular amount paid monthly is a bright red flag for the state auditors seeking more income for the state coffers. This was the case even before the new law that went into effect January first. But now all eyes are on this independent contractor status and fines could apply if an organization should really be putting staff on payroll. Or, they can retain a company to handle their administrative and marketing needs.
Huntington Association Management is a corporation offering a customized number of administrative and marketing tasks handling nonprofits of all sizes. No worries when engaging us. But if you have written or spoken contracts with those claiming a 1099 status, one or both parties must take action. The fines could eradicate the funds raised at your last event, if you’re lucky.
If you wish to be compliant, please call us.