From Business and Employment Lawyer Lori Brown —
The next tip for those who own, or want to own, a small business: do not misclassify employees as independent contractors. The reason that many small business owners want their workers to be independent contractors is because independent contractors are not covered by employment, labor, and related tax laws. Therefore, a new business owner might be tempted to misclassify employees as independent contractors in order to avoid paying payroll taxes, benefits, and other liability. Before you make this determination, you should do a careful analysis of many factors including:
- the type of work the worker is performing
- whether the worker is supervising your employees whether the worker has his/her own tools and equipment to perform the work
- how much control you have over the worker such as who sets the work hours and the pay rate
- whether the worker has his/her own insurance
- whether the worker works for other companies or just for yours
- whether the worker advertises his /her services separately
The above is not an exhaustive list, but demonstrates that this issue is not a simple one.
Read the full story at THIRD TIP: EMPLOYEE V. INDEPENDENT CONTRACTOR
Related articles
- Worker Misclassification: How Job Titles Affect Workers’ Comp And Other Benefits – DigitalJournal.com (digitaljournal.com)
- IRS Cracking Down on ‘Independent Contractors’ (blogs.findlaw.com)
- Third Tip: Employee V. Independent Contractor (lawyerloribrown.wordpress.com)
