Determining 1099 Contractors vs. W-2 Employees

As the end of the year approaches, it’s time for employers to distribute W-2 and 1099 forms, marking an important reminder to review worker classification. Properly categorizing workers is crucial to compliance, yet misclassification is a mistake employers often make. It is estimated that 10-30% of U.S. employers incorrectly categorize their workers as independent contractors. Misclassification, whether accidental or intentional, can lead to significant penalties, fines, and legal issues.

What are the differences?

A business can hire both employees and independent contractors, but it’s important to understand the significant legal differences between the two, including tax implications, benefits eligibility, and workplace rights.

Employees have income tax, Social Security, and Medicare withheld from their paychecks and may be eligible for protections under employment and labor laws. They receive a W-2 form that serves as a record of compensation, certain benefits, and taxes withheld. 

Independent contractors, on the other hand, have no taxes withheld and are not entitled to the rights and standards provided by employment and labor laws. They receive a 1099 form that shows how much an organization has paid them. It is provided when a business has paid a minimum of $600 for a service and taxes were not withheld.  

What should I look for?

Determining the correct classification can be challenging. There are several factors to consider. Here is a breakdown of what they are:

Employees (whether full-time, part-time, temporary, or seasonal) 

  • Commit to specific hours, a designated place of work, and how the work is done
  • Are hired for an indefinite period of time
  • Typically work for one employer
  • Get paid on an hourly or salaried basis
  • Receive company benefits, such as health insurance and paid time off
  • Are protected by the Fair Labor Standards Act (FLSA) for overtime, wages, and other employment protections
  • Use company-provided tools and resources
  • May be trained

Independent contractors (often referred to as consultants, gig workers, or freelancers) 

  • Perform a specific job within a certain amount of time 
  • Perform work for multiple companies 
  • Provide their own tools and resources 
  • Hired for their expertise  
  • Control their own method of work 
  • Do not receive employment benefits or overtime 
  • Pay their own taxes 
  • Receive payment per project or a flat fee

Are you confident in the classification of your employees? If not, Counter Point can help. Making the determination can be tricky and non-compliance can be costly. We can help your organization navigate compliance so you can focus on more strategic tasks.

Smart Open Enrollment Tips for Your Small Business

Now is the right time to build an open enrollment strategy that boosts employee satisfaction, while reducing the administrative workload for your small business.

As retaining top talent becomes increasingly important, every touchpoint—including benefits enrollment—matters. A frustrating enrollment experience can leave employees feeling dissatisfied and even prompt them to seek other opportunities. By streamlining the benefits enrollment process, you can retain your workforce and save time to focus on bigger strategic goals. Whether you have a team of 5 or 500, a streamlined benefits enrollment process is critical to creating meaningful experiences for your employees.

Here are 4 tips to streamline open enrollment for your small business:

1. Review Benefit Offerings

The right benefits are important to employees, and many will shop around for an employer that can offer what they want. Employee’s needs are constantly evolving. To find out what they want, go to the source. Pulse surveys are a great way to find out what your employees value most. Questions can include:

  • Are you happy with your current benefits?
  • Do you feel satisfied with the selection of benefit options?
  • What additional benefits would best support your needs?

2. Create a Communication Strategy

One common challenge with benefits enrollment is insufficient communication. To address this, take a proactive approach by keeping employees informed year-round, not just during the open enrollment period. Regularly update them on key dates and provide clear details about their benefits to ensure a positive overall experience.

Provide employees with easy access to the information they need to make their selections. This might include health plan brochures, benefits guides from your broker, or an online cost comparison tool. Employees will have questions; provide them with a detailed FAQ that provides clear answers, as well as a point of contact who can help with more complex questions.

3. Enhance the Open Enrollment Experience

When employees lack a clear understanding of their benefits, they often pay premiums for services they rarely use—or worse, miss out on enrolling in essential benefits. This can lead to reduced benefits engagement, lower utilization, unexpected financial burdens, and wasted resources. To prevent this, provide your employees with key questions to consider before open enrollment begins. This helps ensure they make informed decisions that align with their needs and lifestyle. Questions can include:

  • Who in my family needs coverage?
  • What coverage options are available?
  • Which option best fits my needs and lifestyle?
  • What will it cost each paycheck?

4. Consider Technology for Open Enrollment

The right software can automate workflows and enhance the experience for everyone across the organization. Human capital management (HCM) technology simplifies routine HR tasks, giving employees a single system to handle essential functions like onboarding, requesting time off, accessing paystubs, and enrolling in benefits. When benefits administration is integrated into the same platform, it further streamlines the process, making it easier for both employees and employers.


Counter Point has solutions and resources that can help streamline benefits enrollment for your business. Request a call today to learn more!

6 Steps to Leverage E-Verify

As a business owner, safeguarding your company’s integrity and promoting a lawful and trustworthy workforce is essential. When hiring new employees, you’ll need to verify their identity and employment eligibility through Form I-9. Along with physically reviewing their documents, E-Verify streamlines the process by allowing you to confirm employment eligibility electronically, making it faster and more convenient.

Follow these six steps to use E-Verify for your business: 

1: Enroll in E-Verify

You’ll need several pieces of information about your company for this task and sign a memorandum of understanding. If you have more than one location where you’ll be hiring, you can either choose to designate one site to create E-Verify cases for new employees for the whole company or enroll each site that will perform its own employment verifications.

2: Complete E-Verify Training

All employers who enroll and any users who will create cases must complete an E-Verify tutorial.

3: Create an E-Verify Case

Within 3 business days after a new hire’s first day, create an E-Verify case. To do this, you’ll input the information from sections 1 and 2 of the Form I-9.

4: Examine Documents

The employee must first transmit copies of the documents they plan to present. Then, during a live video call, complete the remote I-9 verification process by examining the documents to confirm they appear genuine.

5: Note the Use of E-Verify

Indicate you used the alternative procedure on Form I-9. This requires simply checking a box.

6: Keep Copies of All Documents

Make and retain clear and legible copies or electronic images of the documentation presented by employees for review in case of an audit.


Engaging in unlawful hiring practices can result in significant penalties, including fines of up to $3,000 per employee and possible imprisonment. While compliance with employment laws is essential for every employer, keeping up with the regulations can be both difficult and time-consuming.

Schedule a call to find out how Counter Point can protect your business and simplify your compliance processes.

NJEDA Grant Opportunities for Small Businesses 

Small businesses have long been the foundation of New Jersey’s economy, fueling innovation and creating job opportunities across the state. Recognizing their importance, the New Jersey Economic Development Authority (NJEDA) supports their growth and success through initiatives like the Small Business Improvement Grant, designed to strengthen and revitalize small enterprises across the Garden State. Your NJ-based business might be eligible for this economic incentive.

The Grant provides businesses and nonprofits reimbursement for costs associated with making interior or exterior building improvements or purchasing and installing new furniture, fixtures, and equipment. Landlords are not eligible.

Small businesses, as defined by statute, will be reimbursed for 50% of eligible total project costs incurred after March 9, 2020, but no more than 2 years prior to the time of application, with a total grant amount not to exceed $50,000. Only one award is allowed per EIN for the life of the program.

Additionally, to meet eligibility for the Small Business Improvement Grant…

  • The project cost must be at least $5,000
  • You must provide a current tax clearance certificate prior to approval
  • Your business must be in good standing with the Department of Labor and the Department of Environmental Protection
  • You must certify at the time of application that you are not in default of any other EDA or State assistance
  • Your business must remain in the location for at least two years for grants up to $25,000, or at least four years for all other grant award amounts

Read more about the Small Business Improvement Grant specifications.

Apply for the Small Business Improvement Grant.


Counter Point supports your small business. When you thrive, we thrive! To learn more about our payroll and HCM solutions that can be tailored to meet your unique goals, schedule a call with us.

Is Earned Wage Access Right for Your Business?

Did you know…

78% of Americans are living paycheck to paycheck, and

44% have less than $500 saved for expenses?

A rising trend among employers to help ease their employees’ financial burdens is to implement solutions that enable employees to access earnings outside of the traditional payroll timetable. Earned wage access (EWA) is one such solution. This approach allows employees the ability to access their wages promptly through pay cards and digital wallets without disrupting business operations. This not only benefits the employees but also enables employers to enhance the overall employee experience. In fact, 95% of employees would be interested in working for an employer that provides EWA.

Benefits of Earned Wage Access for Employees:

Financial Flexibility

EWA enables workers to retrieve wages before the next scheduled payday. This access is crucial for handling unexpected expenses like medical bills or car repairs without resorting to costly loans or credit card debt. It also helps in avoiding overdraft fees by ensuring employees have funds when needed.

Reduced Stress 

Financial stability is closely tied to mental well-being, and the ability to access earned wages can alleviate anxiety about meeting financial commitments. It empowers employees to take control of their finances, leading to a more positive mindset.

Better Work-Life Balance

Employees can attend to personal matters without the stress of waiting for payday, enhancing their productivity at work. This benefit extends to reduced dependence on payday loans with steep interest rates, breaking cycles of debt.

Benefits of Earned Wage Access for Employers:

Boost Retention and Recruitment 

Companies that offer this benefit demonstrate care for their employees’ financial health. This helps with attracting and retaining top talent. It also contributes to a fairer workplace, promoting equality and appreciation for employees’ hard work.

More Productive Workforce

When workers have access to their wages, they are less distracted by financial worries and can concentrate better on their tasks. This can result in higher efficiency and output across the organization.

Streamline HR Processes 

EWA reduces the need for manual payroll advances or responding to inquiries about pay. This saves time and resources, allowing HR teams to focus on more strategic initiatives.

Cost Savings 

Finally, and perhaps most importantly, with improved retention rates and increased productivity, organizations can see a positive impact on their bottom line.

Is it Right for Your Business?

EWA can benefit a wide range of companies, but certain industries may find it particularly advantageous, particularly those where employees often face financial challenges due to irregular work schedules, hourly wages, or high turnover rates. These industries include retail and hospitality, service, healthcare, manufacturing and construction, and education.

To learn more about EWA and how it can potentially benefit your company, schedule a call with us. 

6 Reasons to Invest in Time and Labor Management Technology

In today’s fast-paced workplaces, where every minute counts, the significance of precise time and attendance tracking cannot be overlooked. For employers looking to ensure efficiency, compliance, and employee satisfaction, implementing robust time and labor management technology isn’t a luxury. Rather, it has become a necessity.

If you are currently relying on manual processes to track your employees’ time and attendance, your organization is being put at risk. Using a fully integrated system for all your human capital management needs, including time and labor management, helps ensure your organization’s future success.

There is much to gain from time and labor management technology, including these 6 benefits:

Mitigate risk

Many industries have strict labor laws regarding overtime, breaks, and other labor practices. Time and attendance software can help employers stay compliant with these regulations by automatically applying rules and policies to employee work hours.

Ensure accuracy and eliminate errors 

A single system with a single database means employee information is entered only once and that information seamlessly flows through each stage of their lifecycle – hiring, onboarding, time and attendance, payroll, etc. The chance for administrative errors is reduced and the need for importing and exporting data is eliminated.

Boost productivity 

An integrated system is more efficient. Not only will it increase the accuracy of your payroll, it will cut down on the time it takes to process. With more time and access to real-time analytics and reporting tools, HR leaders can take on a more strategic role. 

Create better schedules 

Supervisors can easily view, access, and build employee schedules to ensure adequate coverage. They can create customized attendance rules based on their criteria and assign employees to the appropriate shifts.

Improve the bottom line 

With time management software, hours are tracked and recorded in real time, leaving no opportunity for error. This helps cut down on costly time theft and buddy punching.

Identify issues

Alerts can be set to notify managers when employees are punching in late, leaving early, etc. so they can better address concerns before they become a problem. They can also be alerted when employees are approaching overtime.

Time and labor management technology has become indispensable for employers seeking to optimize their operations, ensure compliance, and foster a productive and satisfied workforce. From accuracy and compliance to cost savings and efficiency, the benefits are compelling. As businesses continue to evolve and adapt to changing work environments, investing in time and labor management technology is a strategic move toward maximizing efficiency and maintaining a competitive edge.

Discover Counter Point’s solution for time and labor management and how it can benefit your organization. Request a call today!

Does Your HCM Solution Need an Upgrade? Ask These 8 Questions

When was the last time you evaluated your human capital management (HCM) solution? If your organization is like those studied by Bersin by Deloitte, it’s likely you’ve had the same system in place for nearly a decade. According to the report, companies tend to upgrade or replace their core HCM technology every 7-8 years and when they do it’s a massive change.

For many companies, the mindset is often: “If it’s working fine, why change it?” With so many advancements in the world of HCM, there is no need to settle for “fine.” HCM software not only keeps track of your employee’s information, but robust systems also handle recruitment, performance management, attendance tracking, compensation, benefits administration, work force analytics, scheduling, and more. Cloud-based solutions eliminate the need for software upgrades, provide self-service tools, allow for complex reporting, and give you access to your data from anywhere at any time.

Every organization has its own unique needs when it comes to workforce management. But as businesses grow, even seemingly simple tasks become more complex. What has worked for years, may now benefit from an upgrade.

If you’re not 100% confident in your solution, we’ve identified eight questions to ask yourself to determine the next steps.

Do you need to access multiple systems to get the information you need?

Find yourself piecing together data from various systems to accomplish a single task? There is a better way. With a modern HCM platform, all common HR tasks are accessible from one platform, with a single database, accessible from a single login. No more exporting and importing necessary.

Are you drowning in paperwork?

Your solution should act as an electronic filing cabinet. All documents associated with an employee are stored in one place. Since data is never purged, you can always go back and pull a document quickly on any current or former employee.  

Does onboarding overwhelm your new employees?

Starting a new job is scary. The last thing you want to do is bombard your new hire with forms on their first day. With a robust HCM system you can send out, retrieve the new employee’s electronic signature, and collect all documents. All this can be automated and accomplished before your new employee sets foot in the door. Simply put, onboarding is made simple.

Is your HR department inundated with administrative requests?

If your HR staff spends most of their day fielding questions from employees and tracking PTOs, seek out an HCM solution that provides self-service features. With self-service, employees and managers have 24/7 access to request, view, and approve time off, update personal information, view pay history, manage benefits enrollment, communicate with each other, and more.

Are you noticing a surge in administrative errors?

With a single database you enter employee information only once. Doing so not only saves time, there’s less opportunity for error.

Do you dread open enrollment?

Your solution should simplify the benefits enrollment process. With it, employees can easily compare plans and make elections from anywhere (thanks to self-service.) Smart systems can identify once a dependent ages out of a plan, and remove them automatically from eligibility.

Are confident that your company is compliant with all labor laws?

This is one area where you should not settle. Failure to adhere to labor laws can be costly and detrimental to success. With a modern solution you can build the reports you need to make critical decisions, identify trends, recognize trouble spots, and gather the employee data you need to analyze your organization’s compliance.

Are you able to control access to certain data?

You should be able to. A sophisticated HRIS gives you the ability to set administrative permission levels for all users. When logged in, they can only see the information they have been granted access to.

Ready for an Upgrade?

When it’s time for a change, consider Counter Point HCM. Our state-of-the-art cloud based HCM solution simplifies all of your workforce management needs. And it’s scalable so it grows with you. To learn more, request a call today!

Compliance Alert: Beneficial Ownership Information Report

Updated September 22, 2024

Beginning in 2024, small businesses that fall under the definition of a reporting company are required to file a Beneficial Ownership Information Report (BOIR) with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN).

The BOIR aims to shed light on criminal activities that threaten national security, fair business competition, and our financial system. The reporting system is designed to minimize the burden on small business owners.

What You Need to Know

The BOIR provides information about the ultimate owners or controllers of companies. It helps track beneficial ownership, which includes details about the entity, its beneficial owners, and, in certain cases, information regarding the person who actually filed formation documents with the state.

The deadline for reporting for new entities formed after January 1, 2024 is 90 days from the date of registration or creation.

The deadline for reporting for entities that were already in existence before January 1, 2024 is January 1, 2025.

FinCEN provides guidance on deadlines, exemptions, and how to file

Compliance is Essential

According to the Corporate Transparency Act, the BOIR is an essential tool for promoting transparency and accountability in business ownership. Failure to comply can result in penalties, including:

Civil Penalties: Companies that do not submit the required BOIR or provide false information may face civil penalties. These penalties can be substantial and may vary based on the severity of the violation.

Criminal Penalties: In cases of willful non-compliance or deliberate misrepresentation, criminal penalties may apply. These can include fines and even imprisonment.

Business Disruption: Non-compliance can disrupt business operations. Financial institutions may refuse services to companies that fail to provide accurate beneficial ownership information.

Reputational Damage: Public knowledge of non-compliance can harm a company’s reputation. It may affect investor confidence, business relationships, and overall trust.

Legal Action: Authorities can take legal action against non-compliant entities. This may involve investigations, court proceedings, and legal expenses.

To keep up with updates and alerts related to the Corporate Transparency Act, subscribe to FinCEN updates.


We Can Help!

Counter Point is pleased to announce that we now have a BOIR filing system, powered by Licenz. Through this partnership, we can confidentially and securely help business owners prepare, submit, and track BOIR filings.

With over 30 years of experience working with small businesses, Licenz’s team proactively manages a company’s risk profile to avoid compliance concerns, including those related to BOIR filing. Complying with BOIR requirements can be complex and labor-intensive. This solution ensures peace of mind by saving valuable time and minimizing the risk of costly errors. To learn more, send an email to info@counterpointhcm.com today!

Compliance Alert: 2023 EEO-1 Component 1 Data Collection

What you need to know:

The U.S. Equal Employment Opportunity Commission (EEOC) announced on February 26, 2024 that the 2023 EEO-1 Component 1 data collection will open on April 30, 2024. The deadline to file all 2023 EEO-1 reports is June 4, 2024. The EEO-1 help desk will also be available starting April 30, 2024 to answer any questions about the 2023 collection.

Background:

The EEO-1 Component 1 report is a mandatory annual data collection that requires all private sector employers with 100 or more employees, and federal contractors with 50 or more employees meeting certain criteria, to submit workforce demographic data, including data by job category and sex and race or ethnicity, to the EEOC.

The help you need:

All updates about the 2023 EEO-1 Component 1 data collection can be found at www.eeocdata.org/eeo1.

To learn more about how Counter Point can help support your compliance, request a call today!

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