Independent Contractor Risks in the Digital Media Industry: What Digital Media Companies Can Do to Avoid Costly Mistakes

It is no secret that the tech world relies upon freelancers. Coders, bloggers, website designers, and photographers, among others in the industry, are often engaged as independent contractors instead of traditional employees. The benefits to companies are obvious. They avoid payroll taxes, overtime wages, and employee benefits costs, all while getting the labor they need at a moment's notice.

That's the good news for digital media companies. The bad news is that the IRS and other government agencies are cracking down on independent contractor misclassifications. Many digital media companies, especially those that have relied on freelancers to stay nimble and fuel rapid growth without an established Human Resources infrastructure, are now learning the hard way that the independent contractors they engage are actually employees. And independent contractor mistakes can be very expensive—they often result in costly government audits, fines, and class action lawsuits.