Category Archives: Independent Contractor vs. Employee

01.03.17
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How Does the IRS Determine Who is an Employee?

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The IRS uses a Right to Control Test to determine whether a worker is an employee for tax purposes.

If the employer has the right to control the worker, that individual is deemed an employee and the company is subject to employment tax obligations. If the company does not exercise control over the worker but instead gives that worker significant independence, then the worker is generally viewed as an independent contractor. The more control and supervision by the employer, the more likely the worker will be deemed an employee.

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12.29.16
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What are Right to Control Tests?

marionetteLet’s start with some basics.  Although there are many tests for determining whether a worker is an employee, the most common types of tests are Right to Control Tests.

These tests seek to determine who has the right to control the means and manner by which work is performed.  If the company has more control, the worker is generally an employee.  If the worker has more control, the worker is more likely an independent contractor.  That’s an overstatement, but it captures the gist of the issue.

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12.26.16
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Why Misclassification Matters

Uh Oh!

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With a finding of worker misclassification, the workers you thought were not your employees are suddenly deemed your employees.  What does that mean practically?  It means that you have not been complying with all of the laws that apply to employees.

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12.23.16
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Welcome

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Once upon a time, it was easy for companies to know who their employees were.  Not so much anymore.

With the rise of the gig economy and other creative workforce arrangements, the lines between employee and non-employee have blurred.

Companies often prefer the flexibility of retaining non-employee workers.  These relationships come in many varieties — independent contractors, consultants, staffing agency workers, outsourced vendors, etc.  Many workers prefer these flexible relationships too.  But a growing chorus of government agencies and class action plaintiffs have begun to cry foul. Continue reading →