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Why We Pay as W2 Employees

It is very important for us and our clients to correctly classify their talent workforce. Talent paid through the AllWork platform are paid as W-2 employees. We must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee.

You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.

IRS Government Classification of Contract Workers

Why They are Classified as W2 on AllWork

When classifying talent, we’ve taken the following three IRS classification points into consideration:

  1. Behavioral Control: Does your business have the right to control how the work is done and what type of work is completed, such as through direct instructions or training? If you train the worker, direct what they do, and specify how the work is completed, he or she is a W-2 employee.
  2. Type of Payment: Employees are usually paid salary or an hourly wage. Independent contractors typically receive a flat fee per project.
  3. Type of Relationship: If the person is receiving benefits, there is an understanding this is a permanent role, and they help the regular operation of the business, this person is an employee.

Are you ready to shift to an on-demand staffing model? Get in touch to schedule a demo of the AllWork platform!

Laura Dutile

Director of Marketing at AllWork

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