Marketing & PR Agencies: Payroll Compliance Guide (2026)

The rules that reach marketing agencies specifically

Whether a freelancer is an employee or an independent contractor under the FLSA is decided by the economic reality of the whole relationship using six factors: opportunity for profit or loss, investments, permanence, control, whether the work is integral to the business, and skill and initiative. Signing a contractor agreement or receiving a 1099 does not make a worker a contractor.

The 2024 independent contractor rule is still codified at 29 CFR part 795 (source 89 FR 1741, January 10, 2024) and remains in effect for private litigation, but the Wage and Hour Division stopped applying it in its own investigations under Field Assistance Bulletin 2025-1. On February 26, 2026 DOL proposed rescinding it in favor of a test built on two core factors, control and opportunity for profit or loss; the comment period closed April 28, 2026 and no final rule was posted as of this research.

Copywriters, designers and other creative staff can be exempt creative professionals only if paid a salary of at least $684 per week and their primary duty requires invention, imagination, originality or talent in a recognized artistic or creative field. Work that mainly depends on intelligence, diligence and accuracy does not qualify, and the test is applied case by case.

Account managers may fall under the administrative exemption only if salaried at the standard level, performing office work directly related to management or general business operations of the employer or its clients, such as advertising, marketing or public relations, and exercising discretion and independent judgment on matters of significance.

The duties every employer carries

Federal income tax withholding, Social Security and Medicare, FUTA, deposits on the monthly or semiweekly schedule the lookback period sets, quarterly Form 941, annual W-2s and, for marketing agencies paying contractors, 1099-NEC at the $2,000 threshold in force for tax years after 2025. A late deposit starts at a 2 percent failure-to-deposit penalty and climbs to 15 percent.

Advertising and Related Services (NAICS 5418) and Specialized Design Services (5414) are on OSHA's partially exempt industry list, so agencies in those codes do not keep OSHA 300 logs unless OSHA or BLS asks in writing. Fatalities, in-patient hospitalizations, amputations and eye losses must still be reported.