An Independent Contractor By Any Other Name . . . .

Posted on October 14, 2014 in Employee Issues

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In light of our just-celebrated Labor Day, I thought I’€™d share a little something about the dangerous games that small business owners play when, in essence, they hire employees and pay them as independent contractors.

From Shakespeare’s Romeo and Juliet, 1594:

What’s in a name? that which we call a rose

By any other name would smell as sweet . . . .

Call the person whatever you like, but if you control much of what they do, how they do it, when they do it, and with what tools they do it, you’€™ve probably just hired an employee. And the penalties that befall a company sanctioned for not paying in the appropriate employment taxes are nasty.

As Rush Nigut points out in his post,€œEmployees vs. Independent Contractorsmany businesses treat employees as an independent contractors for two main reasons: (1) they want to save money on taxes, red tape and benefit coverage; and (2) they don’€™t fully understand the distinction between employees and independent contractors. This is not an area to play fast and loose with the law. It’€™s like gambling in Vegas; the house is stacked against you. As confident as you think you may be about the situation, it’s wise to confirm your choice with an employment or other business attorney.

 

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