Worker Classification Evaluation

The IRS, the Department of Labor, and state agencies all place strict limits on when a worker can be classified as an independent contractor ("IC"), and impose serious consequences on entities that misclassify a worker as an IC rather than as a W2 employee, even if the worker prefers to be a contractor, and sometimes even if they have established an LLC or similar entity through which they will be paid. Penalties to Goodnation and your program can be very steep.

To that end, please help Goodnation classify your team members appropriately by answering the following questions before onboarding your new worker.

To consider: While the default first step for hiring a new contractor (or renewing, if they were hired prior to January 2025) is to complete the Worker Classification Evaluation, there are some clear instances in which it is not necessary and you can move straight to onboarding the contractor, such as:

  • An individual working on a one-time project

  • An individual working on a temporary or short-term project

  • An individual working less than full time and who has other clients for which they do similar work

  • Hiring a firm with multiple employees for any length of project, such as a law firm, social media agency, or accounting firm (please note that an individual with an LLC does not automatically qualify them as an independent contractor)

Someone being an independent contractor with us prior to the January 2025 start of this process doesn’t preclude them from going through the evaluation.

When: Complete the form at least two weeks prior to when you plan on an independent contractor beginning

Who: The form is to be completed by a program team member, not by the contractor

What to expect after the form is submitted:

  • Goodnation will review the submission and, based on government worker classification tests, determine if your new worker should be classified as an independent contractor or a W2 employee.

  • Within a few days, we will follow up with appropriate next steps based on the decision. Our process assures that the steps move along quickly and efficiently.