The Challenge – Risk Mitigation
Our client, a national company, had been utilizing independent contractors and consultants at an alarming rate and came to TPG to give them a solution. Our client needed a solution that would allow them to meet IRS guidelines and to remain compliant with their use of independent contractors and consultants.
The Panther Group Solution
TPG conducted an audit of all of the client’s existing independent contractors, consultants and suppliers with our risk mitigation process. TPG uncovered that our client was at a very high risk with not meeting IRS I/C and consultant guidelines, as well as internal risks of not having sufficient insurance coverage for some of its suppliers. Through our analysis, TPG discovered that the client had 25 misclassified workers who did not meet IRS guidelines that also put them at risk. If the IRS determines that an independent contractor or consultant is misclassified, then at a minimum, the employer portions of Social Security, Medicare, federal and state unemployment would be demanded from the “employer”. We also found that several of these independent contractors, consultants and suppliers lacked the appropriate insurance coverage as well as workers’ compensation coverage, leaving our client at risk.
TPG provided the existing independent contractors, consultants and suppliers with guidance on what they needed to be compliant in order to meet all IRS guidelines. Misclassified independent contractors and consultants were converted to appropriate W-2 status. TPG also worked with each supplier and helped them to acquire the appropriate insurance coverage needed, to cover their workers and to protect our client. Our process provided our client with adherence to proper classification of workers, the reduction of huge penalties, back tax assessments, interest payments and retroactive benefits, and the avoidance of co-employment issues.