W-2 or 1099? The Classification Mistakes That Trigger Audits and How to Avoid Them

Program Summary

In our interactive instructor-led 60-minute event, you will learn a practical decision-making framework for one of HR's most consequential and frequently mishandled responsibilities: workforce classification. The W-2 vs. 1099 question comes up constantly, and the stakes for getting it wrong are high. Misclassification can trigger IRS audits, state tax liability, back pay claims, benefit disputes, and Department of Labor investigations.

This session goes beyond the definitions to cover the legal tests, cost calculations, and operational factors that should drive every classification decision. You will leave with a clear process for evaluating each situation on its merits, a sharper eye for the red flags that signal misclassification risk, and a framework for building the right mix of employees, contractors, consultants, and outsourced services for your organization.

You'll discover the following:

• How to apply the legal tests used by the IRS, DOL, and state agencies to classify workers correctly
• Ways to calculate the true cost of each model, including wages, taxes, benefits, insurance, equipment, and administrative overhead
• How to evaluate control, integration, and oversight requirements to determine the right fit for each role
• Steps for building a classification decision framework that holds up to regulatory scrutiny and internal leadership review

Program Highlights

The Legal Landscape: Knowing the Rules Before You Make the Call

• How the IRS, DOL, and individual states define the employee vs. contractor distinction and where the standards diverge
• The most common misclassification mistakes organizations make and the enforcement actions that tend to follow
• How recent regulatory shifts have changed the risk calculus for organizations that rely heavily on contract labor

The Cost Equation: What Each Model Actually Costs You

• How to build a true cost comparison that accounts for payroll taxes, benefits, insurance, equipment, onboarding, and administrative burden
• Ways to weigh short-term flexibility against long-term investment when evaluating whether to hire or outsource
• Specific scenarios where the 1099 model looks cheaper on paper but costs more when risks are priced in

The Decision Framework: Getting It Right Every Time

• How to evaluate each role against control, integration, and specialization criteria to land on the defensible classification
• Ways to build an internal review process so classification decisions are consistent across departments and managers
• Best practices for documenting your rationale so every workforce decision is audit-ready from day one

Question & Answer Session Have your specific questions answered!

ABOUT THE SPEAKER

Michelle Coussens, CEO & Business Strategist | Plan B Consulting Services LLC

Michelle Coussens is a frequently sought-after speaker and business strategist for numerous types of organizations on a wide range of topics related to the workplace, including but not limited to talent management, business strategy, and operational effectiveness. With consistently high participant ratings, her webinars, seminars, and speaking engagements bring practical value to businesses of every size and type. She is a resourceful, resilient, and relentless business professional with demonstrated success in building new programs, driving short-term efficiencies, and improving long-term effectiveness all through innovation, rigor, and courageous leadership. She has direct experience with a variety of industries, as well as in consulting, education, and not-for-profit organizations.