Engaging Independent Contractors in Washington


While California is the state that makes headlines for its frequent legislation and tough employment guidelines, Washington is very similar. It’s considered a risky state to bring on independent contractors due to its strict worker classification rules. The high stakes for mistakes mean it’s important for businesses to take care to stay in good standing. 

Worker Classification

Federal rules around worker classification continue to make it harder for companies to classify workers as independent contractors. Each administration has its own approach to worker classification, but democratic administrations tend to have their sights set on prioritizing misclassification. 

In addition to the federal legislation, states have their own rules. Washington has some of the strictest requirements surrounding worker classification and it’s important for companies to pay attention because violators risk strict penalties such as fines, possible jail time, and damage to their reputations. 

Why Does The Government Care About Worker Classification?

It depends on who you ask. Governing officials are quick to say their first motivation is watching out for workers. Beyond that, it’s clear that there are serious funds on the line, too. Independent contractors write off business expenses and sometimes underreport income while small businesses can avoid certain taxes with fewer W2 employees. In addition, independent contractors are more difficult to track and tax accurately than W2 employees. 

What Does it Mean For Business?

Properly classifying workers is a highly-complicated task. The distinction can depend on factors such as the ability to hire or fire a worker, the kind of occupation, the method of payment, location of the worker and more. Some employers lean toward hiring employees, feeling it gives workers more ownership in the company’s success. Others say leaning on independent contractors makes their business model sustainable. Either way, some companies have had to restructure operations completely or bolster their Human Resources departments to make sure they’re above board. 

What About The Workers?

Washington’s approach to worker classification (among other topics) purportedly intends to protect workers and provide reasonable protections, which is why many consider it one of the most worker-friendly states. Still, some independent contractors find such an approach makes it difficult for them to operate.  

Independent contractors set their own schedule and manage their own businesses. While they are still responsible for paying taxes, they can also take advantage of many write-offs. Along with the perks, they do have the responsibilities that come with owning their own business. They run their own books, pay quarterly taxes, advertise, purchase their own equipment, and deal with the seasonal nature of business. Independent contractors also don’t get paid time off and are responsible for purchasing their own health insurance.

Some workers prefer the stability and possibility for advancement that come with being an employee and having a greater presence at the office and familiarity with the ins and outs of the company.

What Best Practices Mitigate a Company’s Risk?

Unless a company is made up 100% of full-time employees, this subject is relevant to operations. Failure to classify employees correctly could result in fines, back taxes, and even jail time. To stay well on top of worker classification rules, businesses can first determine if their operations are exempt from applicable laws. From there, they can follow classification news and observe how changes play out in practice. For those without the capacity or interest in having an internal team dedicated to the task, engaging a partner can be a great option. Working with an Employer of Record (EOR) or Professional Employer Organization (PEO) is standard best practice in this evolving freelancer economy. 

While both provide payroll and insurance services, the differentiating factor is that an EOR relieves employers of much of the regulatory risk involved in working with independent contractors while a PEO operates as a co-employer and does not assume the employment risk.

What Are The Stakes for Mistakes? 

Big companies like Uber make headlines for their missteps and pay equally big fines for their worker classification choices. Still, it can be a costly mistake to think it’s only the big companies that face consequences. By rescinding the Trump Administration’s Worker Classification Rule, the Biden administration made it easier for workers to argue for minimum wage and overtime protections/compensation. In addition to having to pay back 100% of the matching FICA taxes they would have paid had they classified the worker correctly up front, employers can end up subject to additional penalties.

Misclassifying workers does not save money in the long run. Perhaps scarier than the possibility of monetary damages, misclassification has landed some business leaders under house arrest. 

In addition, class-action lawsuits, failed audits, and negative headlines can damage a company’s reputation to the point where both workers and consumers are hesitant to engage with the company. It’s just not worth it!     

Bottom Line 

With the increasingly narrow definition of an independent contractor, the US is embarking on the real-time evolution of the economy. The most common mistakes when engaging contractors in Washington are misclassifying workers, (of course!), being lax about training requirements, or making privacy and meal wage/overtime errors. 

As the economic landscape shifts and independent contractors rise in prevalence, the financial stakes and potential for missed revenue rise, too. In response, government agencies have been ramping up their focus on the subject. The IRS and DOL are not alone. States are attempting to crack down on misclassification while tightening the reins on training requirements as well as payroll guidelines.

Where the money goes, lawyers follow. There’s big money in class action lawsuits and new cases are always being filed. While fear is never productive, companies should be very, very conscientious when engaging independent contractors in Washington. Companies must be very vigilant to protect their business, stay compliant, and reduce the risk for fines and unpleasant attention from the IRS.

When is Engaging a Partner a Good Idea?

If you don’t have the in-house team to do the job right, it’s worth considering working with a partner. The bottom line is that doing business in Washington is complicated and the consequences for errors can be very damaging. While the onus is on employers to classify workers correctly and stay in line with the state’s changing requirements, it’s possible to navigate a rocky landscape with relative ease.

In our world, accurate worker classification and top-notch risk management when it comes to overtime, meal wage, and other laws are always the priority. We are the first to be aware when change is in the air. We track rules in every state as well as on a federal level and offer services to help clients stay compliant. Curious where your business stands? Reach out for a free consultation on your risk profile

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Cybersecurity: Five Digital Hygiene Practices That Protect Your Customers


If you’re a production company with expensive gear, you lock it up well and insure it. You keep your wallet or purse close to you while you’re in public. Unlike tangible items though, we can’t keep our identity, data, and personally identifiable information (PII) in our sight or locked up with a key. Cybersecurity requires a different approach. Businesses have extra responsibility because they have access to their workers’ personally identifiable information. Every time you engage an employee or a temporary worker, some level of personally identifiable information changes hands. Just think about how many social security numbers pass through your system. If those stay on your hard drives, you are putting your customers’ information at risk! This is one reason, among many, that it’s so important to have a high level of data security on a company level and to train staff in digital hygiene practices.

Current Threats

It seems every week, a major company, city, or hospital experiences an alarming security breach. Each error compromises something, whether it’s privacy (hacked laptop/phone cameras or Zoom calls, for example), data, or PII. Credit monitoring companies, phones, hospitals, and entire cities have been compromised or even taken hostage. The government has identified the cyberworld as its own domain (after land, air, water, and space). As such, it requires businesses and individuals to have a strategy and implement measures to keep countries, businesses, and people safe.

Businesses and consumers increasingly rely on apps and software to get their everyday work done. Customers, employees, and sometimes patients trust companies with their information. This comes with a responsibility to handle that information well.

So What’s a Company to do?

It’s kind of scary, sure, but there are solutions. While some require third-party software, many of them are basic.

  1. Password Management: There are tools that offer super secure ways to make sure your company passwords are accessible only to whom you want them to be. If you’ve ever tried to access a company account after the person who managed it is no longer with the company, you see the value here. Aside from the convenience, it’s a way to keep information super secure.
  2. Make Your Policies And Procedures Airtight: Prevention is always ideal. Train employees on good security etiquette. For most organizations, human error is by far the most likely source of mistakes that lead to breaches.
  3. Check Your Insurance Coverage: Should you experience a breach, having solid insurance coverage in place can make it a lot less painful by covering the financial loss. Talk to your insurance provider about your current coverage and where there might be gaps. 
  4. Conduct Penetration Tests: Have third parties perform monthly security checks and an annual penetration test to ensure that anyone that tries to come after you will have a tough go of it. 
  5. Encrypt Customer Information: Encrypt all information at multiple levels. Encryption scrambles data so that it’s unreadable without the encryption key. 


Any investment in your security is a wise investment indeed.

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Enterprise Object Storage Momentum Heading into 2023


We recently announced solid revenue results for our third fiscal quarter that exceeded our original revenue guidance.  One of the product lines that contributed to this result was our object storage solution, ActiveScale. 


Last spring, we introduced ActiveScale Cold Storage, a significant innovation for large-scale data archiving.  Essentially, we were the first to introduce a low-cost S3 Glacier class of storage for the data center.  ActiveScale is cloud object storage for your data center, and with the addition of its own cold Glacier-class tier, ActiveScale is the lowest cost, most secure, and greenest object storage platform in the world. 

This innovation is perfect for any organization that needs to store and protect multiple Petabytes of data for many years. If your organization is managing at Petabyte-scale, we should talk.  And if you are scaling from 10’s of Petabytes to 100’s of Petabytes or more, we should definitely talk.  At massive scale, ActiveScale is a fraction of the cost of any other object storage system, consumes less power and cooling resulting in lower carbon emissions, and is the only object store that protects data on physically air-gapped storage with immutable object locking.


In 2022, we had many large ActiveScale wins in industries including genomics, global semiconductor manufacturing, finance, and government agencies across the globe. Recently, a managed service provider has installed ActiveScale Cold Storage as the basis for cold storage services to their clients.  Some of these organizations have well over 100 Petabytes of ActiveScale deployed and continue to expand their environments. They value the low acquisition and operational costs, and extreme availability, data protection and durability that ActiveScale provides. 


We’ve also been recognized for our object storage innovation by industry analysts, including:

  • Being named the leader in object archiving in the GigaOm Sonar Object Storage on Tape Report
  • Being named a Leader in the Coldago Research Map 2022 for Object Storage
  • We have also been recognized  as  a Visionary in the 2022 Gartner® Magic Quadrant™ for Distributed File Systems and Object Storage*

It’s great to see the customer adoption, along with recognition from the industry. We are excited to carry this momentum into 2023. 

More big stuff coming from Quantum in the first half of this year – stay tuned!

Gartner, Magic Quadrant for Distributed File Systems and Object Storage, Julia PalmerJerry Rozeman , et al.., 19 October 2022. Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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Meet The Team: Ethan Morse


Meet Ethan Morse–our market researcher.

Ethan’s background in computer science and his penchant for both programming and creative endeavors make him a natural fit for his role at PayReel. As a market researcher, Ethan identifies and reaches out to prospects who could benefit from PayReel’s services and software.

Previously, Ethan spent a decade as a sushi chef. He most enjoys making nigiri because of the level of excellence it requires. At one restaurant, he had to pass a test—making, plating, and serving the delicacy in front of his head chef. He stayed after hours practicing the form, which appealed to his desire to continue learning and improving. While the connection may not be intuitive, his current role requires similar skills—extreme attention to detail, organization, and patience.

While he considers himself an introvert, Ethan enjoys skateboarding, getting outside, and spending time with friends.

Something Else: Ethan is an avid reader and has three different books available at all times to suit his changing moods. At the moment, his reserve includes a classic novel, a book on economics, and a collection of short stories.

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Itching For Something New? These States Offer Relocation Incentives


Do you ever get a little antsy about your life and find yourself wanting to change careers, remodel your house, or even cut bangs? In certain ways, it’s getting easier than ever to scratch that itch by getting a change of scenery without having to establish a new career. Between the increase number of self-employed folks and those with traditional roles that have recently turned remote, people are working from home in record numbers! This study predicts that the trend will only continue, with almost a quarter of the American workforce working remotely within two years. While some enjoy the traditional office environment, this study shows that 60% of employees find an out-of-office work life aspirational. That, in combination with the 46% of workers looking to change jobs in the coming year means a lot of us might be spending some time daydreaming on Zillow. Some states are willing to put up some cash to get you to consider making their location home.

3 States That Will Pay You to Relocate

The requirements vary a bit from place to place and you’ll need to make sure you qualify. For example, you may need to bring your own remote job and stick around for a minimum amount of time. Their incentives range from straight up cash to housing assistance and even office space.  Whatever you’re looking for, there might be something here to help you with a new start.


If you’re ready to brave mud season and get a good dose of their famous Fall colors just heading out to the supermarket, consider Vermont. There, you could get a $7,500 grant if you’re selected for their relocation incentive program .


If you could use some Midwestern hospitality in your life, head over to Newton, Iowa, where you’ll get big-time support buying a home if you qualify for their housing initiative  (rhubarb not included).


You’ll be blown away by Oklahoma’s incentives. Duncan offers $4,000 to new arrivals through its talent relocation initiative  while Tulsa is luring folks with $10,000, free work desk space, and more with their Tulsa Remote program.

The Bottom Line

If you’re among the many folks looking for a change, you may as well consider the states that are incentivizing folks to bring their talents (and their remote incomes) to their locations.

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1099-K Requirements Are Changing: Here’s What You Need to Know


The American Rescue Plan Act of 2021 changed the way businesses report income from payment cards and third party network transactions such as Venmo and CashApp.

Here’s What You Need to Know

Which Transactions Qualify?

Any payment after December 31st, 2021 is subject to the new rules, which indicate that a threshold of $600 in aggregate payments (with no minimum transaction requirement) will trigger the need for a 1099-K. Since it only applies to third-party network transactions for the provision of ‘goods or services,’ personal transfers/gifts and reimbursements do not qualify. The policy does not represent a change to the taxability of income, according to a release  from the IRS, which notes that “All income, including from part-time work, side jobs or the sale of goods is still taxable.”

While this form applies only to business transactions, it’s possible to mistakenly receive a 1099-K for a non-business transaction. If this happens, you can contact the issuer directly to address the error.

Tips to Make Tax-Time Easier

1099-K payments belong on a taxpayer’s Schedule C along with business expenses/deductions. Keep all your personal and business transactions separate from each other, including 1099-K earnings.  Keeping separate banking accounts and credit cards will make tax time a lot easier. This, along with keeping careful records and maintaining receipts, is also beneficial should you ever face an audit. Having transactions separated will keep you from breaking your brain trying to retroactively parse out expenses on your credit card statements. Credit card statements are not considered sufficient records to the IRS. To that end, keep receipts for any business expenses you plan to deduct.

The Bottom Line

The threshold has changed and you may be seeing a 1099-K that you weren’t expecting. Report it properly and you’ll be good to go!

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