Just because you call them a contractor does not mean that they are …
Lawyer Joseph Turner It looks at the puzzle many business owners face when dealing with employees. Simply put, if employee classification is handled inappropriately, the employer can face many liabilities, including significant tax issues.
Even if a worker is classified as an independent contractor by the employer, there is still a possibility that the worker may have misclassified. In other words, when a worker acts as an employee in all respects, but is simply called an independent contractor, the employer will not be protected from liability.
In general, the more control you have over a person’s work and pay, the more likely they are to be classified as an employee. Here are some questions you should ask yourself when hiring an employee or freelance contractor:
- How much control do I have over this person’s job?
- Can I freely hire and fire this person?
- Can I limit this person’s working hours or the methods they use while working?
- Do I need to supervise this person while they are working?
- Is this person’s business somewhat different from mine?
- Is this person doing similar jobs to other employers?
- Does this person work from a separate building?
- Do I provide this person the tools, computers, etc. they need to complete the work?
- How is this person paid? A messenger? One job at a time?
- How much independent skill does this person need to complete his job?
- How different is my relationship with this person than my relationship with other employees?
These guidelines can help you find out whether or not someone works for you as an employee or independent contractor. It is important for your business security that you know what your legal relationship is with the people you employ. An attorney can help you navigate this area effectively and can support you in ensuring that you are properly protected in the future.
Do you have questions about the process that will help you properly classify employees and contractors? Consult today With one of our HR advisors or attorneys let us help guide you through your specific employee concerns.
author: Christy Donahue
Kristi is the Marketing Director (CMO) for Slingshot, the parent company of Law 4 Small Business (L4SB). She holds an MBA with a Psychology undergraduate. Christy, formerly senior vice president of Albuquerque Bank, now leads the marketing efforts of six legal brands of the Slingshot Group of Companies.