OMS Blog: Go Beyond

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Entrepreneurs

1099 vs W-2 Employee: How to Classify Workers Correctly and Protect Your Business

Worker classification is one of the most important and most commonly misunderstood responsibilities for startups and growing businesses. Determining whether someone should be treated as a W-2 employee or a 1099 independent contractor impacts everything from payroll taxes to compliance risk. For employers, the distinction comes down to one fundamental question: do you control how the work is done, or just the final result? Getting this right isn’t just about following rules - it’s about protecting your business from costly penalties and ensuring a solid operational foundation.

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Workplace Safety & Workers' Comp Insurance

Partner With an Experienced Broker

Recent data from Google indicates that internet searches for workers’ compensation lawyers have increased by more than 1,700%. This trend highlights the growing importance of maintaining a comprehensive risk management plan—one that both protects employees from workplace injuries and shields small businesses from the financial and legal consequences of injury-related claims.

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