Personal Fitness Professional - September/October 2016 - 19


the Internal Revenue Code, as well as subjected to criminal prosecution.
Ultimately, one in three companies fail a
worker classification audit and 46 percent of
independent contractors reviewed by the IRS
are found to be misclassified. The government
is starting to pay much closer attention to instances of misclassification and audits are becoming more frequent.
Meanwhile, class action lawsuits by groups
of independent contractors requesting employee status are becoming increasingly common; reports suggest that this is one of the
hottest areas in employment litigation. Contractors claiming that they were effectively
employees may successfully sue a company for
employee benefits.

Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS. While waiting for a determination from the IRS, the employer should
treat the worker as an employee, withholding all necessary taxes.
Seek out advice from your accountant or attorney to help you properly classify your staff.
Understanding the difference between independent contractors and employees and classifying
accordingly will keep your business compliant
and protected.

Melissa Knowles is the Vice
President for Gym HQ, A
ClubReady Company. Her
knowledge spans strategic
operations, development
of staff training materials
and programs, cost-savings analysis, reporting development and
implementation, fitness department overhaul,
client retention systems and corporate management. She also specializes in operational
and HR focused areas.

WHY DO EMPLOYERS
MISCLASSIFY WORKERS?
In most circumstances, the reasoning comes
down to money. By classifying an employee
as an independent contractor, an employer
avoids paying: the employer's share of the
social security and Medicare taxes (hence
the penalties document above); overtime
pay; employee benefits such as sick leave,
vacation and medical; unemployment tax
compensation and workers' compensation
insurance.
SO HOW DOES AN EMPLOYER KNOW
WHICH WAY TO CLASSIFY?
The IRS says, "Businesses must weigh all
factors when determining whether a worker
is an employee or independent contractor.
Some factors may indicate that the worker is
an employee, while other factors indicate that
the worker is an independent contractor. There
is no "magic" or set number of factors that
"makes" the worker an employee or an independent contract, and no one factor stands
alone in making this determinations. Also, factors which are relevant in one situation may not
be relevant in another."
Clear as mud, right?
After going through a full review of what the
person does and how they do it, an employer
still may be left scratching his head. Here's a
simple way to approach the issue: if it walks like
a duck and quacks like a duck, it's a duck. Or in
this instance, if the position requires the person
to be directed as to how, when, where and with
what to do the job, he's an employee. Fill out
that W4 and file those taxes!
If after thorough review, an employer still
is unable to make a classification decision,
he can file Form SS-8, Determination of
SEPTEMBER-OCTOBER 2016 | WWW.FIT-PRO.COM | 19


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Table of Contents for the Digital Edition of Personal Fitness Professional - September/October 2016

Contents
Personal Fitness Professional - September/October 2016 - Cover1
Personal Fitness Professional - September/October 2016 - Cover2
Personal Fitness Professional - September/October 2016 - 3
Personal Fitness Professional - September/October 2016 - 4
Personal Fitness Professional - September/October 2016 - 5
Personal Fitness Professional - September/October 2016 - Contents
Personal Fitness Professional - September/October 2016 - 7
Personal Fitness Professional - September/October 2016 - 8
Personal Fitness Professional - September/October 2016 - 9
Personal Fitness Professional - September/October 2016 - 10
Personal Fitness Professional - September/October 2016 - 11
Personal Fitness Professional - September/October 2016 - 12
Personal Fitness Professional - September/October 2016 - 13
Personal Fitness Professional - September/October 2016 - 14
Personal Fitness Professional - September/October 2016 - 15
Personal Fitness Professional - September/October 2016 - 16
Personal Fitness Professional - September/October 2016 - 17
Personal Fitness Professional - September/October 2016 - 18
Personal Fitness Professional - September/October 2016 - 19
Personal Fitness Professional - September/October 2016 - 20
Personal Fitness Professional - September/October 2016 - 21
Personal Fitness Professional - September/October 2016 - 22
Personal Fitness Professional - September/October 2016 - 23
Personal Fitness Professional - September/October 2016 - 24
Personal Fitness Professional - September/October 2016 - 25
Personal Fitness Professional - September/October 2016 - 26
Personal Fitness Professional - September/October 2016 - 27
Personal Fitness Professional - September/October 2016 - 28
Personal Fitness Professional - September/October 2016 - 29
Personal Fitness Professional - September/October 2016 - 30
Personal Fitness Professional - September/October 2016 - Cover3
Personal Fitness Professional - September/October 2016 - Cover4
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