# Performance West — Pre-Written Reddit Posts

**Last updated:** 2026-03-19

These are educational, helpful posts designed for specific subreddits. Each one provides
genuine value, is 150–300 words, and ends with "-- Justin". Performance West or a free
tool is mentioned only where natural. These are NOT ads — they're the kind of posts that
build reputation over time.

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## Post 1: r/smallbusiness — Contractor Misclassification Guide

**Title:** The IRS uses a 20-factor test to decide if your "contractor" is actually an employee — here's the short version

If you're paying someone on a 1099 and they work set hours, use your equipment, and only work for you — the IRS and DOL may disagree with your classification. Here's the quick breakdown.

The IRS looks at three categories:

**Behavioral control:** Do you tell them *how* to do the work, not just *what* to do? Do you set their hours? Do you require them to work on-site? The more control you exert, the more it looks like employment.

**Financial control:** Do they invoice multiple clients, or just you? Do they have their own business expenses? Can they make a profit or take a loss? If you're their only income source and they have no business risk, that leans employee.

**Relationship type:** Is there a written contract? Do they get benefits? Is the work a core part of your business? A "contractor" who does the same thing as your employees, indefinitely, is hard to defend.

The penalties for getting this wrong are real: back taxes, penalties, and potentially back-pay for benefits and overtime. Some states (California AB5, Massachusetts, New Jersey) have even stricter tests.

If you want to quickly check where you stand, there's a free contractor classification quiz at performancewest.net/tools/contractor-quiz — 10 yes/no questions, instant risk score, no email required to see results.

The goal isn't to scare you — it's to help you fix it before someone else flags it.

-- Justin

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## Post 2: r/smallbusiness — CCPA Checklist for Small Businesses

**Title:** If you have customers in California and make over $25M (or handle 100K+ consumers' data), CCPA applies to you — here's the checklist

A lot of small business owners assume CCPA only applies to big tech companies. It doesn't. If you meet any one of these thresholds, you're covered:

- Annual gross revenue over $25 million
- Buy, sell, or share personal info of 100,000+ consumers or households
- Derive 50%+ of revenue from selling personal information

And "personal information" under CCPA is broad — names, emails, IP addresses, purchase history, browsing behavior. If you run an e-commerce store with California customers, you're probably collecting this.

**Quick compliance checklist:**

1. **Privacy policy** — Must specifically disclose CCPA rights, categories of data collected, and whether you sell data
2. **"Do Not Sell" link** — Required on your homepage if you share data with third parties (including ad networks)
3. **Consumer request process** — You need a way for people to request access to or deletion of their data, and you must respond within 45 days
4. **Vendor contracts** — Your data processing agreements with vendors need CCPA-specific language
5. **Employee training** — Anyone handling consumer requests needs to know the process
6. **Recordkeeping** — Track all requests and responses for 24 months

If you want a quick self-assessment, we built a free 8-item privacy compliance check at performancewest.net/tools/privacy-check. Takes 2 minutes.

The fines are $2,500 per unintentional violation and $7,500 per intentional violation — per consumer, per incident.

-- Justin

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## Post 3: r/Entrepreneur — Business Formation Guide

**Title:** LLC vs C-Corp vs S-Corp — a plain English breakdown for people who just want to pick the right one

I see this question every week, so here's the straightforward version:

**LLC (Limited Liability Company)**
- Best for: Most small businesses, especially service businesses and solo founders
- Tax: Pass-through by default (profits taxed on your personal return)
- Liability: Personal assets protected from business debts
- Paperwork: Minimal. Operating agreement + state filing. No board meetings required.
- Downside: Can't issue stock, so harder to raise VC funding

**C-Corp**
- Best for: Businesses planning to raise venture capital or go public
- Tax: Double taxation — corp pays tax on profits, you pay tax again on dividends
- Liability: Personal assets protected
- Paperwork: Board meetings, minutes, bylaws, stock issuance, annual reports
- Upside: Can issue multiple classes of stock, unlimited shareholders

**S-Corp (not actually an entity type)**
- What it is: A tax election you make with the IRS, applied to an LLC or C-Corp
- Best for: Businesses earning $60K+ in profit where you want to reduce self-employment tax
- How it works: You pay yourself a "reasonable salary" (subject to payroll tax), and take remaining profit as distributions (not subject to SE tax)
- Downside: Must run payroll, file additional tax forms, limited to 100 shareholders

**My suggestion for most people:** Start as an LLC. If/when profits warrant it, elect S-Corp status. Only form a C-Corp if you're raising institutional money.

If you need help with the actual filing, Performance West handles business formation from $179 (basic) or $399 complete with EIN + operating agreement + registered agent ($99/yr). 3-5 business days.

-- Justin

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## Post 4: r/accounting — 1099 vs W-2 Classification Test

**Title:** Quick reference: how the IRS and DOL actually evaluate 1099 vs W-2 classification (they use different tests)

Something that trips up a lot of business owners — and their accountants: the IRS and DOL use *different tests* to evaluate worker classification, and a worker can pass one test but fail the other.

**IRS Common Law Test (20 factors, grouped into 3 categories):**
- Behavioral control (who decides how, when, where work is done)
- Financial control (who bears expenses, can the worker profit/lose)
- Type of relationship (permanence, benefits, written contract)

No single factor is decisive. It's a totality-of-circumstances analysis.

**DOL Economic Reality Test (6 factors):**
1. Extent to which the work is an integral part of the employer's business
2. Worker's opportunity for profit or loss based on managerial skill
3. Worker's investment relative to the employer's investment
4. Degree of skill and initiative required
5. Permanence of the relationship
6. Nature and degree of the employer's control

The DOL test focuses more on economic dependence. A worker can look like a contractor under IRS rules but an employee under DOL rules — which matters for FLSA (overtime, minimum wage).

**State tests add another layer.** California's ABC test (AB5) presumes employment unless the worker is (A) free from control, (B) performing work outside the usual course of business, and (C) has an independently established trade. Massachusetts and New Jersey have similar strict tests.

If you have clients asking about this, there's a free classification quiz at performancewest.net/tools/contractor-quiz that runs through the key factors in about 2 minutes. Useful for initial risk screening.

-- Justin

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## Post 5: r/humanresources — Employee Handbook Compliance Checklist

**Title:** Federal and state-required employee handbook policies — the ones that actually get you in trouble if they're missing

I review employee handbooks regularly and the same gaps come up over and over. Here's what's legally required or strongly recommended at the federal level, plus common state requirements people miss:

**Federally required (or effectively required):**
- Equal Employment Opportunity (EEO) statement
- Anti-harassment and anti-discrimination policy (Title VII)
- FMLA leave policy (50+ employees)
- ADA reasonable accommodation process
- FLSA overtime and timekeeping policy
- USERRA military leave rights
- COBRA continuation coverage notice (20+ employees)
- OSHA workplace safety

**Commonly required by states (check yours):**
- Paid sick leave policy (CA, NY, WA, CO, and 15+ other states)
- Meal and rest break policy (CA is especially strict)
- Lactation accommodation policy
- Jury duty leave
- Voting leave
- Crime victim/witness leave
- State-specific anti-discrimination categories (sexual orientation, gender identity, political affiliation)
- Pay transparency requirements (CO, CA, WA, NY)
- Social media privacy protections

**The ones that cause the most problems when missing:**
1. At-will employment disclaimer — without it, employees argue they have an implied contract
2. Overtime policy — if your policy doesn't match FLSA requirements, you're exposed
3. Anti-harassment reporting procedure — a policy without a reporting mechanism doesn't protect you
4. Paid sick leave — states are adding this rapidly and the rules vary widely

If your handbook hasn't been reviewed in the last 2 years, it's probably out of date. Performance West does handbook compliance reviews for $999 flat, covering all states where you have employees, with a 5–7 business day turnaround.

-- Justin

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## Post 6: r/ecommerce — CCPA Compliance for Online Stores

**Title:** Running an online store with California customers? Here's what CCPA actually requires you to do

If you sell to California residents and meet any CCPA threshold (over $25M revenue, 100K+ consumer records, or 50%+ revenue from selling data), this applies to you. But even below those thresholds, complying is smart risk management.

**What most e-commerce stores get wrong:**

1. **"We don't sell data"** — Under CCPA, sharing data with ad platforms (Google Analytics, Meta Pixel, TikTok Pixel) can constitute "selling" or "sharing" personal information. If you run retargeting ads, you're probably sharing data.

2. **Privacy policy is generic** — CCPA requires specific disclosures: categories of PI collected, purposes, categories of third parties, consumer rights. A template privacy policy from 2019 doesn't cut it.

3. **No "Do Not Sell" link** — Required on your homepage. Not buried in your footer privacy policy. An actual link or button.

4. **No consumer request process** — Consumers can request to know what data you have, delete it, or opt out of sale/sharing. You need a process and must respond within 45 days.

5. **Vendor contracts** — Your payment processor, email platform, analytics tools — all need data processing agreements with CCPA language.

**What to do right now:**
- Run through the free privacy compliance check at performancewest.net/tools/privacy-check
- Update your privacy policy with CCPA-specific language
- Add a "Do Not Sell or Share My Personal Information" link to your homepage
- Review your vendor contracts

CCPA fines are $2,500–$7,500 per violation, per consumer. For an e-commerce store with thousands of California customers, that adds up fast.

-- Justin

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## Post 7: r/marketing — TCPA Consent Requirements for SMS Campaigns

**Title:** If you're running SMS marketing campaigns, here's what TCPA actually requires for consent (it changed in 2025)

The FCC's one-to-one consent rule went into effect January 2025 and it fundamentally changed how SMS marketing consent works. A lot of marketers are still running campaigns under the old rules. Here's what you need to know:

**Before (old rule):**
- Consumer fills out a lead form
- Lead form has a consent disclosure that lists multiple companies
- One consent = permission for all listed companies to text/call
- Lead generators could sell one lead to dozens of buyers

**Now (one-to-one consent rule):**
- Consent must be given to ONE specific seller at a time
- No more blanket consent covering multiple companies
- The consumer must clearly know exactly who will be contacting them
- Lead generators must get separate consent for each buyer

**What this means for your campaigns:**

1. **Lead gen forms** — If you buy leads, make sure the consent was given specifically to YOUR company, not a list of 30 companies
2. **Consent language** — Must identify your company by name, describe the type of messages, and explain how to opt out
3. **Record retention** — Keep proof of consent (timestamp, IP, exact language shown, what they agreed to)
4. **Opt-out** — Must be honored within a reasonable time. STOP, UNSUBSCRIBE, CANCEL must all work.

**Penalties:** $500–$1,500 per unsolicited text. Class actions routinely settle for millions.

If you want to check whether your current SMS program is compliant, there's a free TCPA compliance check at performancewest.net/tools/tcpa-check — 8 questions, takes about 2 minutes, includes a penalty exposure calculator.

-- Justin

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## Post 8: r/marketing — The One-to-One Consent Rule Explained

**Title:** The FCC's "one-to-one consent" rule killed the bulk lead gen model — here's what replaced it

If your agency buys leads from aggregators and uses them for SMS or calling campaigns, this is important. The FCC's one-to-one consent rule (effective January 27, 2025) changed the consent standard for telemarketing.

**The old model (RIP):**
A consumer fills out a form on a comparison shopping site. The fine print says "By submitting, you agree to be contacted by Company A, Company B, Company C, and their partners." One form submission → consent for dozens of companies to call and text.

**The new model:**
Consent must be "given to only one identified seller at a time." The consumer must know exactly which company will contact them and must agree to each one individually.

**Practically, this means:**
- **Lead forms** must present each company separately and get individual consent
- **Comparison sites** can still collect leads but must get one-to-one consent per buyer
- **"And their partners"** language no longer provides valid consent
- **Existing leads** obtained under the old blanket-consent model are no longer valid for new outreach after January 2025

**What to audit right now:**
1. Where are your leads coming from? Ask your lead gen vendors exactly how consent is obtained.
2. Can you produce proof of one-to-one consent for every lead? (Timestamp, IP, exact form language, specific company named.)
3. Does your consent language identify your company by name?
4. Are you still using leads from before January 2025 that were obtained via blanket consent?

If you're not sure whether your campaigns comply, Performance West does marketing campaign compliance reviews for $599 per campaign — 2–3 business day turnaround, covers consent, content, opt-out, timing, and disclosure.

-- Justin

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## Post 9: r/tax — Contractor Misclassification Tax Implications

**Title:** The actual financial cost of misclassifying an employee as a 1099 contractor — it's worse than most people think

I see a lot of discussion about 1099 vs W-2, but rarely does anyone break down what it actually costs when the IRS or a state reclassifies your contractor as an employee. Here's the math:

**Federal exposure (IRS):**
- 100% of the employee's share of FICA (6.2% SS + 1.45% Medicare) that you should have withheld
- Your share of FICA (6.2% + 1.45%) that you should have paid
- Federal income tax you should have withheld (estimated at 25% for most workers)
- Penalties: 1.5% of wages for failure to withhold income tax + 20% of FICA not withheld
- Interest on all of the above from the date it was originally due

**For a contractor paid $80,000/year, reclassified for 3 years:**
- FICA (both shares): ~$18,360
- Estimated income tax withholding: ~$60,000
- Penalties: ~$15,000+
- Interest: ~$5,000+
- **Total exposure: ~$98,000+** for ONE worker over 3 years

**State exposure (varies, but often includes):**
- State income tax withholding + penalties
- State unemployment insurance (retroactive)
- Workers' compensation premiums (retroactive) + penalties for no coverage
- State-specific misclassification fines ($5K–$25K per worker in some states)

**And it gets worse:**
- Reclassified employees may be entitled to retroactive overtime under FLSA
- They may be entitled to benefits (health insurance, 401k match, PTO)
- Other workers in the same role get reclassified too — it's never just one person

If you have contractors and want a quick gut-check, there's a free classification quiz at performancewest.net/tools/contractor-quiz. Takes 2 minutes and tells you where your risk is.

-- Justin

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## Post 10: r/startups — Compliance Checklist for New Businesses

**Title:** Compliance checklist for startups — the stuff nobody tells you about until you get fined for it

You formed your LLC, got your EIN, opened a bank account. Congratulations. Here's everything else nobody mentioned:

**Entity & Corporate:**
- [ ] Operating agreement (even for a single-member LLC — protects your liability shield)
- [ ] Foreign qualification in every state where you have employees, an office, or significant sales
- [ ] Annual report filings (most states require these, due dates vary, miss it and you lose good standing)
- [ ] Business licenses (city, county, and state — varies by location and industry)

**Employment (once you hire anyone):**
- [ ] Determine if they're actually a W-2 employee or a legitimate 1099 contractor
- [ ] Register for state unemployment insurance
- [ ] Get workers' compensation insurance (required in almost every state)
- [ ] Set up payroll and withhold federal/state taxes
- [ ] I-9 verification for every employee (within 3 days of hire)
- [ ] Post required workplace posters (federal + state)
- [ ] Create an employee handbook covering required policies

**Privacy (if you collect customer data — you probably do):**
- [ ] Privacy policy on your website (required by law in most states + CCPA if CA customers)
- [ ] Cookie consent banner (if you use analytics or advertising pixels)
- [ ] Data processing agreements with vendors who handle your customer data
- [ ] Process for handling consumer data requests

**Marketing (if you send emails, texts, or make calls):**
- [ ] CAN-SPAM compliance for emails (unsubscribe link, physical address, honest subject lines)
- [ ] TCPA consent for any SMS or phone marketing
- [ ] DNC list scrubbing if you do outbound calling

This is not legal advice — it's a compliance consulting checklist. If you want help with any of this, Performance West handles all of these as fixed-price services. Check out performancewest.net for specific pricing and turnaround times.

-- Justin

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## Post 11: r/smallbusiness — When to Worry About TCPA

**Title:** If your business sends promotional text messages, you need to know about TCPA before it costs you $500–$1,500 per text

I'm seeing more and more small businesses get hit with TCPA demand letters, so here's the quick version of what you need to know:

**TCPA (Telephone Consumer Protection Act) applies if you:**
- Send promotional text messages to customers or prospects
- Make marketing calls using an autodialer or prerecorded voice
- Send faxes (yes, this still happens and yes, it's still regulated)

**What you need:**
1. **Prior express written consent** for marketing texts/calls — this means the person specifically agreed to receive messages from you, in writing (digital is fine), with a clear disclosure
2. **Opt-out mechanism** — every message must include a way to stop. STOP must work.
3. **Time restrictions** — no texts or calls before 8 AM or after 9 PM in the recipient's time zone
4. **Identification** — messages must identify who's sending them

**What gets businesses in trouble:**
- Texting people who filled out a contact form (that's not consent for marketing texts)
- Buying a phone list and blasting it
- Not honoring opt-outs quickly enough
- Texting people at 6 AM because your system uses your time zone, not theirs
- Using a platform that auto-sends without proper consent documentation

**The cost:** $500 per violation (per text). $1,500 per willful violation. Class actions are common. A 1,000-person text blast without proper consent = $500K–$1.5M exposure.

Free compliance check: performancewest.net/tools/tcpa-check — 8 questions, instant risk assessment, penalty calculator.

-- Justin

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## Post 12: r/Entrepreneur — Why Fixed-Price Compliance Beats Hourly Attorney Rates

**Title:** I spent $4,200 on a lawyer to file a state registration that should have cost $249 — here's what I learned about compliance vs. legal work

This isn't a knock on lawyers — you need one for litigation, contracts, and legal opinions. But a lot of what business owners pay attorneys $300–$500/hour for is procedural compliance work: filing forms, registering with state agencies, reviewing handbooks against checklists.

**Things that are compliance/administrative work:**
- Filing annual reports with the Secretary of State
- Registering your LLC in a new state (foreign qualification)
- Filing FCC Form 499-A
- Reviewing your employee handbook against current federal/state law
- Auditing your privacy policy against CCPA requirements
- Checking contractor classification against IRS/DOL tests

**Things that require an actual attorney:**
- Drafting complex contracts
- Responding to lawsuits
- Representing you in regulatory proceedings
- Providing legal opinions on ambiguous situations
- Tax strategy and planning

The difference matters because compliance work has predictable scope. An annual report filing is the same process every time. A contractor classification review uses published IRS and DOL criteria. There's no reason to pay someone $400/hour to do something that has a fixed process and a known deliverable.

That's why I started Performance West — fixed-price compliance services with defined deliverables and turnaround times. State registration: $249, 1-4 weeks. Handbook review: $999, 5-7 business days. CCPA audit: $2,499, 7-10 business days. No billable hours, no surprise invoices.

Not a replacement for a lawyer. A complement to one.

-- Justin

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## Post 13: r/Bookkeeping — 1099 Red Flags Your Clients Might Be Missing

**Title:** Quick 1099 checklist I use when a client says "they're all contractors"

Every tax season I hear this from at least a few clients: "Don't worry, they're all 1099." And every time I ask the same follow-up questions that usually reveal at least one person who probably shouldn't be on a 1099.

Here's the short list I run through:

1. Does the worker set their own hours, or does the client set a schedule?
2. Does the worker use their own tools and equipment?
3. Does the worker provide similar services to other businesses?
4. Is there a written independent contractor agreement?
5. Can the client terminate the relationship without cause?
6. Does the worker have their own business insurance?
7. Does the worker invoice for their services?

If the answer to 3+ of these is "no," that's a conversation worth having with the client before filing season. The IRS 20-factor test and the DOL economic reality test both look at the actual working relationship, not what the contract says.

The penalties for misclassification include back employment taxes, unpaid overtime, and potentially liquidated damages. Some states have it even worse — California's PAGA allows per-pay-period penalties.

I know it's not our job to be the compliance police, but flagging potential misclassification issues early can save a client from a very expensive problem down the road.

-- Justin

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## Post 14: r/QuickBooks — Setting Up 1099 Contractors Correctly in QB

**Title:** Before you add that 1099 contractor in QuickBooks, make sure they're actually a contractor

QB makes it easy to set someone up as a 1099 vendor and start cutting checks. But the IRS doesn't care how you categorize them in your accounting software — they care about the actual working relationship.

Quick sanity check before you hit "Save":

- Does this person work a set schedule that you control? → Might be an employee
- Do they only work for your company? → Red flag
- Do you provide their tools, software, or workspace? → Red flag
- Are they doing the same work as your W-2 employees? → Big red flag

QuickBooks will happily generate 1099-NEC forms for anyone you classify as a vendor. But if the IRS or your state labor board disagrees with that classification, you're looking at back taxes, penalties, and potentially years of unpaid benefits and overtime.

The "I'll just 1099 everyone" approach is the most common payroll compliance mistake I see. It's also one of the easiest to fix if you catch it early.

If you're not sure about any of your workers, there's a free classification quiz at performancewest.net/tools/contractor-quiz that walks through the IRS criteria. Takes about 2 minutes.

-- Justin

---

## Post 15: r/antiwork — Your employer calling you a "contractor" doesn't make it true

**Title:** If your employer controls your schedule, provides your tools, and you only work for them — you're probably an employee no matter what they call you

I see a lot of posts here about being paid as a 1099 when the working relationship looks nothing like independent contracting. Here's the thing: it doesn't matter what the contract says or what your employer calls you. The IRS and Department of Labor look at the actual working relationship.

Key factors that point toward employee (not contractor):
- Your employer sets your schedule or requires specific hours
- They provide your tools, equipment, software, or workspace
- You can't work for competitors or other clients
- You receive training from them on how to do the work
- The work you do is a core function of their business
- The relationship is ongoing with no defined end date

If most of these describe your situation, you may have a valid misclassification claim. This matters because as an employee you'd be entitled to overtime pay, minimum wage protections, unemployment insurance, workers' comp, and employer-paid FICA taxes.

Employers do this to save 20-30% on labor costs — they avoid payroll taxes, benefits, overtime, and workers' comp insurance. But it's illegal, and enforcement is increasing. The DOL has been actively auditing, and state agencies (especially California, New York, and New Jersey) are cracking down hard.

You can file a complaint with your state labor board or the DOL — there's no cost and protections exist against retaliation.

-- Justin

---

## Post 16: r/IRS — How misclassifying contractors can snowball fast

**Title:** PSA for business owners: misclassifying one worker as 1099 instead of W-2 can cost more than you think

Seeing a lot of posts about IRS notices related to worker classification. Here's a breakdown of what's actually at stake:

**If the IRS reclassifies your 1099 workers as employees, you owe:**
- Back FICA taxes (employer share: 7.65% of wages)
- FUTA taxes
- Interest on unpaid taxes from the date they should have been paid
- Penalties for failure to file (W-2s instead of 1099s)
- Potential Section 3509 penalty assessments

**And that's just the IRS.** Your state may also come after you for:
- State unemployment insurance taxes (SUTA)
- State withholding taxes
- Workers' compensation insurance premiums

**And then there's the DOL side:**
- Back overtime pay (time-and-a-half for all hours over 40/week)
- Liquidated damages (double the back-pay)
- Up to 3 years of back wages

The total cost per misclassified worker can easily hit $50,000+ depending on how long they've been misclassified and whether overtime is involved.

The good news: voluntary reclassification programs exist and the IRS's Section 3509 gives reduced rates if you proactively fix the issue before an audit. Fixing it early is always cheaper than getting caught.

-- Justin

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## Post 17: r/payroll — The compliance side of payroll that software doesn't handle

**Title:** Your payroll software runs payroll. It doesn't tell you if your classifications are wrong.

QuickBooks, Gusto, ADP, Paychex — they all process payroll correctly once you tell them who's exempt, who's non-exempt, and who's a contractor. But none of them tell you whether those classifications are right in the first place.

Common issues I see that payroll software won't catch:

1. **Exempt employees who don't actually qualify for exemption.** The salary threshold is one piece — they also need to meet the duties test. An "Office Manager" making $55K isn't automatically exempt.

2. **1099 contractors who look like employees.** The software generates 1099-NEC forms for anyone you mark as a vendor. It doesn't verify the working relationship.

3. **State-specific requirements.** Several states have different overtime rules, meal break requirements, and classification tests than federal law. Your payroll software uses whatever you configured.

4. **Multi-state employees.** Remote workers create tax withholding and registration obligations in their home state, not just yours.

The payroll software is the engine — but you still need to make sure you're putting the right fuel in it. Getting the classification and exemption decisions right upfront prevents expensive corrections later.

-- Justin

---

## Post 18: r/EmploymentLaw — Contractor misclassification from the employer's perspective

**Title:** For employers reading here: the cost of misclassification vs. the cost of doing it right

I see a lot of posts here from employees who think they're misclassified. Here's the employer-side math that explains why this happens — and why fixing it proactively is almost always cheaper.

**Why employers misclassify (the perceived savings):**
- No FICA employer share (saves ~7.65%)
- No unemployment insurance (saves 2-6%)
- No workers' comp premiums (saves 1-5%)
- No overtime obligations
- No benefits obligations

Total perceived savings: 15-30% of labor costs per worker.

**What it actually costs when caught:**
- Back FICA taxes (7.65% × all wages × all years)
- Back SUTA and FUTA taxes
- Back overtime for all hours over 40
- Liquidated damages (double the overtime owed)
- IRS penalties and interest
- State penalties
- Attorney fees (if employee sues)
- Potential class action if multiple workers are affected

A single misclassified worker earning $50K/year over 3 years can easily generate $50-$100K+ in back-pay, taxes, and penalties. Multiply that by the number of workers affected.

The fix: get a professional classification review done. The cost is a fraction of the exposure. And if you need to reclassify, doing it voluntarily before an audit is much cheaper than getting caught.

-- Justin

---

## Post 19: r/telecom — Why small carriers are moving voice operations to Canada

**Title:** The regulatory math for moving your carrier to Canada is getting hard to ignore

If you're running a small voice carrier or VoIP operation in the US, here's what your annual regulatory burden looks like in 2026:

- Section 214 license: $1,895 filing fee + $5-15K in attorney fees
- FCC Form 499-A: annual filing + USF contributions at 36.6% of interstate/international revenue
- STIR/SHAKEN: $3-5K/yr for SBC compliance
- CALEA: $50-500K+ for intercept infrastructure (yes, even for small resellers)
- RMD: must file or downstream carriers block your traffic
- State PUCs: $50-750 per state where you have customers
- Annual FCC regulatory fees: $460-1,000+
- Telecom taxes on customer invoices: 15-40% in surcharges (USF, excise, E911, TRS, state)

And now the FCC is proposing to limit DID reselling to a single level (FCC 26-17, March 2026).

Compare that to registering as a carrier in Canada:

- CRTC registration: letter to the Secretary General, published in a public notice
- No CALEA equivalent for resellers (upstream provider handles intercept)
- No USF equivalent
- No state-level telecom registrations (federal only)
- No telecom surcharges on customer invoices (just standard GST/HST on Canadian sales, and international B2B is zero-rated)
- No FBI background checks or Team Telecom review
- BC small business tax rate: 11% combined (vs. 21%+ in the US)

Canada and the US share country code +1. Canadian DIDs are indistinguishable from US numbers. Latency from Toronto or Vancouver to US cities is sub-10ms — same as domestic. VoIP.ms has been doing this from Montreal for years.

I work with carriers setting up Canadian operations. The typical Year 1 savings vs. maintaining a US 214 license are $50-500K+ depending on your CALEA situation.

Not legal advice — talk to a US and Canadian telecom attorney about your specific situation. But the regulatory math is getting increasingly one-sided.

-- Justin

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## Post 20: r/VoIP — Has anyone set up a Canadian carrier to avoid FCC 214 headaches?

**Title:** Thinking about registering as a Canadian carrier instead of dealing with 214/499A/CALEA — anyone done this?

Looking at the numbers and I'm curious if anyone here has gone the Canadian route.

Context: I run a small wholesale voice operation. My 214 compliance costs me roughly $25-30K/yr between USF contributions, STIR/SHAKEN, RMD maintenance, annual regulatory fees, and the accountant who prepares my 499-A. And that's before CALEA — I'm using a safe harbor solution that runs about $5K/yr.

Meanwhile I keep seeing Canadian companies like VoIP.ms selling US DIDs and SIP trunking without any of this overhead. They're operating under CRTC jurisdiction, not FCC.

From what I've researched:
- You incorporate a BC corporation (no Canadian citizenship required for resellers)
- Register with the CRTC as a domestic reseller + file BITS for international
- Get published in a CRTC public notice
- Your Canadian carrier can purchase US DIDs from wholesale providers like Flowroute/Iristel
- Same +1 country code, sub-10ms latency to US, customers can't tell the difference

The CRTC doesn't have:
- 214 license requirement
- CALEA mandate for resellers
- USF contributions
- State PUC registrations
- The DID reselling restrictions the FCC just proposed

Has anyone here actually made this move? What was your experience? Any gotchas I'm missing?

-- Justin
