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Labor and Economic Opportunity

What if we paid for the services of individuals whom we do not consider to be our employees? Will we have to pay tax on their earnings?

What are taxable wages is the most frequent question arising from a UIA audit. Employers may consider an individual to be an independent contractor or sales agent, but the UIA may consider their earnings to be taxable wages, based on legal precedent and UIA policies
and procedures. The auditor will apply all precedents and procedures prior to making an adjustment for these services, and will fully explain to you the rationale behind this decision. If you do not agree with the auditor’s decision, you have the right to request that a written determination be made by the UIA. You further have the right to appeal this determination, first through the UIA’s and the State’s administrative appeal
process, then through the court system.