Federal and state legislators and government agencies are increasingly cracking down on misclassifications of employees as independent contractors. Misclassification may be on the rise because employers must generally withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment and workers’ compensation premiums based on wages paid to an employee. Employers generally do not have to withhold or pay any taxes on payments to independent contractors, making independent contractors an attractive option in challenging economic times.