The 5-Minute HR Mistake That Cost $15,000

Every business owner wants to save money and avoid unnecessary risks—but some mistakes are more expensive than others. One of the most common and costly errors small businesses make is misclassifying employees and contractors.

A Costly Oversight

A new client came to us after receiving a $15,000 penalty for misclassifying a 1099 contractor who should have been an employee. The mistake wasn’t intentional—it happened because no one had walked them through the basics of classification.

Unfortunately, this is a frequent issue for startups and small businesses. Many entrepreneurs unknowingly mislabel workers, leading to costly fines, legal disputes, and compliance headaches. The good news? It’s 100% avoidable with the right guidance.

How Optimized HR Consulting Can Help

We stepped in to:

• Appeal the penalty and mitigate financial damage

• Correct their classification process to prevent future risk

• Integrate compliance systems to ensure their workforce is properly documented

• Automate payroll and HR workflows for seamless administration

  
  

Why Outsourcing HR Protects Your Business

Many companies try to manage HR on their own—until a mistake costs them thousands. By outsourcing HR support, business owners can:

• Avoid compliance risks before they become expensive problems

• Ensure payroll accuracy and classification alignment

• Gain expert guidance without hiring a full-time HR team

If you’re unsure whether your workforce classifications are correct, don’t wait until there’s a fine attached to the answer. Optimized HR Consulting provides budget-friendly, ad hoc HR solutions that keep your business protected.

Let’s make sure your business is set up for success. Contact us today.