If you’re still getting to grips with W-2 vs 1099, make sure to read this first. It breaks down how to classify workers correctly in the US – a must before you dive into anything else.
Already got to grips with classification. That’s great because compliance doesn’t stop there.
In 2025, contractor compliance has evolved. New state laws, rising enforcement, and the growing use of digital verification mean businesses need to think beyond forms. The focus now? Making sure your entire contractor process holds up across states, audits, and systems.
Contractor Classification is Just the Start: What to Do Next
You might have correctly classified your contractor as 1099. But have you:
- Verified their legal right to work in the US?
- Completed onboarding in line with state-specific rules?
- Got everything audit-ready digitally?
- Built in flexibility to keep up with legal changes?
What Employers Need to Know about compliance
If you’re hiring across multiple states, keeping up with compliance isn’t just a nice-to-have, it’s essential. But what that means can vary depending on who you’re hiring and where.
Take Florida and California, for example. California is cracking down on worker misclassification, putting more pressure on companies engaging freelancers and independent contractors. Getting it wrong can mean fines and reputational risk. You need a setup that can flex to local rules without adding unnecessary admin.
Florida, on the other hand, is tightening rules for W-2 employees. Employers with 25 or more staff must now use E-Verify to check if new hires are legally authorised to work in the US. E-Verify is the federal system built for this purpose, and more states are following suit. Crucially, it applies only to employees and not to independent contractor, for now.
E-Verify Compliance in 2025: Here’s where things stand:
- Florida: E-Verify is mandatory for private employers with 25+ staff, with proposals to broaden enforcement.
- Montana, Idaho, Kentucky, and Texas: New bills are on the table to make E-Verify mandatory for W-2 hires.
- Federal level: The Accountability Through Electronic Verification Act (S.1151) could bring a national E-Verify requirement for employees.
At Project Global, we already use E-Verify across all 50 states. Why? Because we believe compliance should be proactive, not reactive. It’s not just about ticking boxes, but about building trust.
It’s Not Just About the Paperwork
In 2025, enforcement agencies are zooming in on the whole picture. It’s no longer enough to have the right form or the right box ticked.
Here’s what other companies are doing to build up their worker compliance
1 Right-to-Work Checks for Contractors: US Best Practices
Even though E-Verify does not apply to independent contractors, it’s still essential to validate a contractor’s right to work – especially for non-citizens. That means reviewing documents properly and having clear procedures in place.
2 Background Checks for US Contractors: What to Include
Depending on the role, clients increasingly expect background screening during onboarding – criminal checks, identity verification, or even financial history for certain industries. These checks reduce risk and build trust, especially when contractors are handling sensitive data or operating under your brand.
3 Contractor Management That’s Centralised
When your contractors sit across different teams or time zones, staying on top of compliance can get messy. A centralised system keeps everything in one place, so onboarding stays consistent, and nothing slips through the cracks.
And because today’s top contractors have options, a seamless experience from onboarding to fast, accurate payments can be the difference between keeping great talent or losing it.
Your 2025 Contractor Compliance Checklist:
So, what does best-in-class contractor compliance look like today?
- Legally validated classification (W-2 vs 1099)
- Right-to-work verification (as part of good onboarding practice)
- Background checks, if needed
- State-specific onboarding workflows
- IRS and state-level tax reporting
- Centralised, audit-ready records
- Consistent policies across all teams/entities
Trying to manage this manually or across disconnected tools is huge risk.
What worker compliance is coming in 2025 in the US?
Here’s what’s on the radar for 2025:
- Several states, including New York and Pennsylvania, are actively discussing broader E-Verify mandates. While nothing is confirmed yet, it’s important to track these developments and prepare in advance.
- Increased audits and scrutiny around contractor misclassification
- Federal proposals, such as the PRO Act and Department of Labour rule changes, aim to strengthen gig worker protections but these are still under review.
Compliance isn’t slowing down. It’s scaling up.
Why Global Companies Should Pay Attention
If you’re based outside the US and hiring freelancers within it, these details matter. Local laws can be easy to miss but costly to ignore. Just like GDPR changed how companies approach data, US compliance is evolving quickly and publicly.
Being able to say, “we meet the highest standards for contractor compliance” isn’t just reassurance. It’s essential.
How Project Global Helps
We don’t just help you classify contractors. We simplify the whole process – across states, departments, and borders.
With us, you get:
- Contractor classification, done right
- Right-to-work checks for contractors
- E-Verify checks for employees in all 50 states
- Compliant onboarding, tailored by state
- Optional background checks
- A great experience for you and your contractors
Whether you’re working with one freelancer or hundreds across the US, we’ll help you stay compliant, reduce risk, and move faster.
Ready to move beyond worker classification in the US?
Let’s make sure your US contractor strategy is future-proof. Get in touch today to see how we simplify compliance.
