Keep your books in order. As a team grows, so do employers’ back-of-house duties, such as maintaining proper insurance coverage and payroll.

For example, companies might try to classify workers as independent contractors (1099) rather than full-time employees (W-2) because the companies don’t have to provide medical insurance or workers’ compensation to 1099s. In addition, wages are non-taxed for 1099s.

“It’s unfortunate, but we see a lot of companies that just try to pay everybody as a contractor, and the states are cracking down on that,” says John Dreibelbis, CEO of Hemp Temps.

He points to Colorado as an example. The state conducted an audit of all employees who were classified as 1099 and found those people were not paid through a Federal Employer Identification Number (FEIN). A deeper dive revealed that there was misclassification of employees.