Pelican Staffing Solutions provides nationwide payrolling services for independent contractors can be used throughout the company wherever contractors are engaged, and a 3rd party agency is needed to represent them. We can act as the Employer of Record or as the Agency of Record.
Payrolling services for independent contractors provide tax compliance with Federal and State tax regulations and also unemployment, workman's compensation, employee benefits, and other employee-related liabilities.
Weekly Payroll for Contractors
Payrolling situations are becoming more common for employers who locate contract candidates without the assistance of a recruiter. In a traditional payrolling situation, employers have located the candidate but do not want to add him/her to their own payroll. Employers need a back-office provider to become the employer for the contract employee, thus eliminating a variety of paperwork issues, benefit problems, liability, exposure, etc. Independent contract employees (1099s) are converted to W-2 payrolled employees.
IRS & TAXES
In recent years, the IRS has started to realize the large sums of potential tax revenue they are losing due to misclassified 1099 independent contractors who should legally be W-2 employees. When a company pays a contractor on a 1099-misc. form, they avoid the following: state and Federal tax withholdings, deposits and reports; the employer's share of Social Security and Medicare taxes, State and Federal unemployment insurance premiums, state disability insurance premiums, worker's compensation costs, fringe benefits, vicarious liability for employee negligence, and EEOC regulations.
The IRS estimates that it loses between $4 to $20 billion per year in unpaid taxes as a result of this misclassification problem. Understandably, the IRS has made it a priority to investigate 1099-misc. forms that are turned in at the end of the tax year. The IRS is continually conducting audits to determine whether or not contractors are being properly classified.