Many business owners don't realize they're exposed until something goes wrong.
They assume:
"This is how my payroll company told me to do it"
"It's just temporary"
"We've never had an issue before"
But when not every worker is treated the same way in payroll, risk quietly builds in the background.
Payroll isn't just about cutting checks. It's the system that creates your proof:
When some workers are excluded from that system—for any reason—those protections disappear for that portion of your workforce.
That's when problems start.
A common workaround:
At first, this feels manageable. Over time, it creates:
If someone challenges pay or classification months later, incomplete records work against you.
Most employers in trouble weren't cutting corners. They were following advice from their payroll provider, trying to keep things moving without disruption.
Intent doesn't matter when regulators review your records. What matters is what you can prove.
And proof lives in documentation.
Here's the uncomfortable truth:
If something goes wrong, the payroll company doesn't face the penalties—you do.
Even if the setup was their recommendation.
Even if they said it was the "only option."
Responsibility stays with the employer.
A compliant payroll system treats:
Once payroll becomes fragmented, so does your defense.
When all workers aren't on payroll, you're more vulnerable to:
These issues rarely appear overnight. They build quietly—until they don't.
If your payroll company won't add all of your workers, the problem isn't just inconvenience.
It's exposure.
And the longer it goes unaddressed, the harder it is to unwind.
At Baron Payroll, we've been processing ITIN workers as W-2 employees—correctly and compliantly—for over 20 years. We built the processes other providers avoid because doing payroll right means doing it for your entire workforce.
Want to see what compliant ITIN payroll costs?
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