Can You Pay a Contractor Overtime? Should You?

independent-contractor-questionsLet’s talk about good old-fashioned 1099 Independent Contractors — you know, those individuals who are happy to be called contractors until they’re released and then decide they should have been treated as employees.

When retaining a contractor, one of the goals, of course, is to ensure that the contractor is properly classified and is not really (factually) an employee. A secondary goal, however, is to limit liability if the contractor is misclassified.

Today’s question sits at the intersection of these two goals. Continue reading

How Does the IRS Determine Who is an Employee?


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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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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