Are You Really Hiring an ‘Independent Contractor’?
By Nina Kaufman, Esq.In my practice, I’m finding that the IRS and Department of Labor are getting more aggressive about enforcing the proper classification of workers. Essentially, they want to be sure that you’re not hiring a worker as an “independent contractor” (thus avoiding the payment of employment taxes), yet treating him/her as an employee by micromanaging every aspect of how the work gets done.
There are subtle nuances between an independent contractor and a part-time employee, largely centering around the issue of “control.” How much control do you have over how the work gets done, when and by whom? Getting on the wrong side of that balance could cost thousands of dollars in unpaid employment taxes, plus interest and penalties.
Bill Bischoff’s article in the Wall Street Journal online sets out some handy distinctions, in addition to suggesting you look at IRS Form SS-8, which lets you know the factors the IRS considers in making its determination.
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