Paying ITIN workers off payroll or as 1099s might feel like a small decision…
But it can open the door to much bigger problems.
Most of the time, it comes down to confusion or convenience.
Business owners are told:
So they move forward thinking it’s fine.
The problem is, the DOL doesn’t work that way.
There isn’t just one risk. There are several—and they tend to show up all at once.
Yes—and this is often how it starts.
Most investigations begin with something small:
From there, it escalates.
In many cases, yes.
A common misunderstanding is:
“They have an ITIN, so they must be a contractor.”
That’s not how classification works.
The DOL looks at:
If the worker operates like an employee, they must be treated as one.
If not, you may owe:
And these costs can escalate quickly.
This is one of the biggest—and most overlooked—risks.
If a worker gets injured on the job, there’s a strong chance... workers’ compensation will deny the claim.
That means:
What felt like a simple workaround can turn into a serious financial problem overnight.
Yes—and it’s rarely a small number.
You may be responsible for:
In real-world examples, business owners have faced tens or even hundreds of thousands of dollars in total exposure
Absolutely.
Beyond the financial hit, there’s:
The consequences of non-compliance go far beyond money—they impact your business, your time, and your peace of mind
If someone is working under your direction, the answer is simple:
Put them on payroll as a W-2 employee.
For ITIN workers, that means:
Most payroll problems don’t start with bad intentions.
They start with small decisions that feel easier in the moment.
But when the DOL gets involved, those decisions are reviewed in detail—and the cost of fixing them is always higher than doing it right the first time.
Use our instant price calculator to see how much it costs to put your ITIN workers on payroll.
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