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Business owners are responsible for determining whether the individuals that are providing services to their business are employees or independent contractors based on the rules set forth by the Federal Department of Labor.

 Once you have determined that workers should classified as Employees, then there is information that you need to secure for your records to remain compliant.

The Internal Revenue Service, Department of Homeland Security and Immigration Services, and States Department of Revenue agencies all have requirements that must be followed. 

 Once you have determined that workers should be classified as Contractors, you must collect and maintain proper documentation so that 1099 returns can be filed at the end of each tax year.

The Internal Revenue Service has strict requirements that must be followed for anyone paid that is not a corporation.