From Accucheck Payroll Management Blog — Tristan Ruland offers terrific guidance on how to determine if a worker is an employee or independent contractor and recommendations for minimizing the risk of misclassification. He writes:
“As an employer, you are expected to exercise sound judgment in your classification of workers. To help in making that call you can use the following tactics to help minimize a potential misclassification:
- Ensure that the business has a written agreement (an independent contractor agreement) with its independent contractors and that the independent contractor agreement describes the scope of the work to be performed, the compensation paid, the timing of the work and clearly define the independent contractor’s tax obligations;
- Ensure that the independent contractor has liability insurance, particularly if that contractor is a professional.
- Ensure that the independent contractor who is a professional has his or her pertinent license and that such license is current;
- Ensure that the independent contractor has a current business license from the city/county in which he or she is operating;
- Do not set independent contractor’s work hours;
- Do not provide the independent contractor with tools, equipment, software or supplies with which to perform his or her work;
- Do not provide the independent contractor any benefits, which the business provides to its employees.
- Do not retain or terminate or attempt to retain or terminate assistants or employees for or of the independent contractor.
Ensure that the independent contractor submits invoices for his or her work…”
Read the full story at Do You Have Independent Contractors or Employees?