The letter is written to inform all the staffs about an upcoming change of policy that would take effect on February 22, 2019. The approach would entail shifting from the current W-2 payment plan to 1099. The management has come to this decision after extensive consultations with relevant authorities and shareholders of the company.

The implementation of 1099 income plan would benefit the employees in various ways that are more advantageous than the current salary plan. One of the benefits of 1099 payment involves an improved cash flow before tax payment since through such an arrangement, workers can file their taxes at specific dates unlike in W-2 method where employers file taxes on behalf of their employees.

Secondly, 1099 staffs would receive their payments in full without any deductions since workers are considered as self-employed or business owners. Hence, with such assumptions, employees are provided with an opportunity to deduct any business expenses they incur from their income tax return; a privilege that is not enjoyed by W-2 workers. For instance, these deductions can be made from the costs of office supplies, mortgage or rent payment, premiums paid to insurance companies, travel or automobile expenses, and home office rates.

Therefore, as mentioned above, 1099 salary would be quite beneficial to both the organization and its employees since it will enable the staffs to get their full payment and later file their taxes. On the other hand, the organization would also reap the benefits of no liability for employees’ actions, no filling of employment taxes, and no income tax withholdings.

The management trusts that the new policy will not cause any disruption or negative impact on the employees’ engagement with the company. For further clarifications on the matter, kindly contact the management.

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