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1099
America Wet LTD is a corporation that works with agencies & brands to help them solve creative problems. The relationship is between your company and America Wet LTD: a business to business relationship, both on paper and in practice.
Some HR and Finance departments have been taking a one-size-fits-all-W2 approach with all types of contractors. Meanwhile, many of large, medium, and small agencies & brands have looked at the overall criteria and realized that 1099 is both the appropriate and accurate classification when dealing with corporate contractors.
Sometimes, we hear “but what if the duties are similar to job positions on staff?” And while an individual contractor on 1099 could be reviewed during a labor audit, a corporate contractor, by definition, cannot be an employee, and this condition does not apply.
It comes down to the three ways the IRS makes the determination:
1. BEHAVIORAL
America Wet LTD independently defines how we approach the work. We deliver work, hit deadlines, address feedback, and push forward. We don’t go into your office, we don’t use your software or equipment, and we work on the project wherever we need to, providing your company with the best creative ideas possible.
2. FINANCIAL
America Wet LTD is legally structured as a corporation, and therefore must pay our own taxes, workers comp, liability insurance, unemployment insurance, social security, Medicare, healthcare, and 401k plans. We also pay for our own physical workspace, technology, professional development, and do not receive a salary from your company.
3. THE TYPE OF RELATIONSHIP
America Wet LTD, as a corporation, does not receive any of the individual employee benefits typical of a W2 employee, such as paid time off, health insurance, life insurance, dental insurance, retirement benefits, childcare benefits, or any workplace perks. The length and terms of our relationship is outlined in a contract, and usually limited to around 5-15 days, with the possibility to reevaluate and extend. In any given year, we work for a wide range of agencies, clients, and nonprofit organizations.
We hope this helps explain why America Wet LTD can’t go on W2, because another corporation cannot be your employee. We are happy to provide any additional information to your HR / Finance Dept., or work via a vendor system if you prefer.