Question

Read and respond to the following in a 500 word essay no later than midnight March 08 2020.

Many small business have to squeeze down cost any way they can just to survive. One way many business' do this is to hire workers as "independent contractors," rather than as regular employees. Unlike rules for regular employees, a business does not have to pay Social Security taxes(FICA) and unemployment insurance payments for independent contractors. Similarly, it does not have to withhold federal, state or local taxes or the employers share of FICA taxes. The IRS has a 20-factor test that determines whether a worker should be considered an employee or an independent contractor, but many business' ignore these rules or interpret them loosely in their favor. When workers are treated as independent contractors, they do not get a W-2 at tax time(they get a 1099 instead), they do not have any income taxes withheld and they find themselves subject to self- employment taxes, by which they bear the brunt of the employees and the employers share of FICA taxes.

1) When a business abuses this issue, how is the independent contractor hurt?

2) If a business takes an aggressive position - that is, interprets the law in a very slanted way - is there an ethical issue involved? Who is hurt?

Answer 1

1) When a business abuses this issue, how is the independent contractor hurt?

2) If a business takes an aggressive position - that is, interprets the law in a very slanted way - is there an ethical issue involved? Who is hurt?

Refer to the below image for more detailed explanation.

abuses this issue? how is the independent Reqsxement when a Contractor business hurt 2 The contractor must pay "selt - employment tox" which represents both the employer's and the employeers Share of normal FECA taxes. In adittion because no Sederal Encome taxes were withheld during the year, the contractors have to come up with the full amount of income taxes at tax time. This is a heavy burden on many lower - wage workers who are treated as independent contractors. : If a boliness takes an aggressive position that is, interprets the law in a very slanted way - is there an ethical issue involved & who is hort 9 Reqjuxement Businesses may take aggressive and those positions may be tested unethical if a business knowingly Contractors when they are aware should be treated as employees. eajuivalent of lying positions on tax issues, in court. It is treats worklers as that those workers. This is the moral contractors are hurt tares, and do not medical insurance. because receive they pay a heavier employee benefits Share of such as