Just because you call them a contractor doesn’t mean they are….
Attorney Joseph Turner looks at the conundrum that many business owners face when dealing with employees. Simply put, if classification of employees is handled inappropriately, the business owner could face a multitude of liabilities, including significant tax issues.
Even if a worker is classified as an independent contractor by the employer, there is still a possibility the worker has been misclassified. In other words, when a worker is acting as an employee in every respect, but is simply being called an independent contractor, the employer will not be protected from liability.
Generally speaking, the more control you have over a person’s work and pay, the more likely he or she will be classified as an employee. Here are some questions you should be asking yourself when making the designation of employee or independent contractor:
- How much control do I have over this person’s job?
- Can I hire and fire this person freely?
- Can I decide the hours this person works or the methods they use when working?
- Do I need to supervise this person when they are working?
- Is this person’s business somehow distinct from my own?
- Does this person do similar jobs for other employers?
- Does this person work out of a separate building?
- Do I provide this person with the tools, computers, etc. he or she needs to complete the work?
- How is this person paid? Hourly? One job at a time?
- How much independent skill does this person need to complete their work?
- How different is my relationship with this person from my relationship with my other employees?
These guideposts can help you figure out whether or not someone is working for you as an employee or as an independent contractor. It is important for the security of your business that you know what your legal relationship is with the people you hire. An attorney can help you navigate this area effectively and can support you in ensuring you are properly protected down the line.
Do you have questions about the process that will help you correctly classify employees and contractors? Consult today with one of our Attorneys and let us help guide you through your specific employee related concerns.
Law 4 Small Business, P.C. (L4SB). A little law now can save a lot later. A Slingshot company.