A growing club running twelve coaches on 1099 contracts, a state audit letter arriving in the same quarter, a set of coaching duties that on any reading exceeded independent contractor status, and a payroll spread that would sink the club at the wrong conversion rate. We ran the analysis and rebuilt the coaching stack at the correct classification.
Actual duties included fixed practice schedules set by the club, mandatory attendance at club-directed training, use of club-provided uniforms and equipment, and payment on a fixed weekly stipend. The state's ABC test would fail every prong.
A state agency audit letter arrived asking for coaching classification documentation for the prior two years. The club's operating budget could not absorb a full W-2 conversion at existing stipend levels. The board had never modeled the payroll impact.
We ran the classification analysis against the state's ABC test and against the federal common-law test, documented the honest posture, and structured the response to the audit letter around cooperation, correction, and forward-looking classification. We converted every coach to W-2 status at the correct pay rate with a defined per-hour stipend, an overtime posture consistent with the hours actually worked, and a workers' compensation policy sized to the payroll.
We modeled the payroll impact against the club's registration revenue, restructured the stipend schedule to hold the club's economics without cutting coach compensation on a net basis after employer-side taxes, and drafted a new coaching agreement template on a proper employment framework.
We coordinated with the club's CPA on retroactive reporting under the state's voluntary program and closed the audit without penalty.
"The old paper said one thing. The state said another. Brandon got us to the answer without breaking the club."
— Board Treasurer, Competitive Youth Club
A four-coach club with informal 1099 arrangements can outgrow that classification without anyone noticing, because the contract never changes even as the actual working relationship does. Fixed schedules, mandatory training, club-provided equipment, these are the facts a state auditor looks at, not the label on the contract.
The moment an audit letter arrives is not the moment to discover that a full W-2 conversion might not fit the budget. Payroll modeling against actual registration revenue, done before the response goes in, is what keeps a compliance fix from becoming a solvency crisis.
We run coach and staff classification analyses for youth clubs facing growth or an audit, and we structure the conversion so the club's economics survive the correction.
Most engagements are flat fee, quoted before the work begins — and most matters resolve without litigation. Start with a free consultation.