How do I classify employees correctly?

Employees are classified as either exempt from overtime, and are normally paid salary, or nonexempt, and are paid hourly with overtime for over 40 hours in a workweek.  Classification can be difficult. There are also independent contractors and booth renters, which are not legally “employees.” If there is a disagreement between you and the IRS in how you classified a new hire, a court will decide how your employee should be classified.

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