Having a problem deciding whether you should try your workers as employees or independent contractors?

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As a business owner hiring or contracting with other individuals to provide services, you must determine whether the individuals providing services are employees or independent contractors. 

We have to look to the facts that provide evidence of the degree of control and independence fall into three categories:

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

Financial: Are the business aspects of the worker’s job controlled by the payer? (These include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)

Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

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Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

 

Still not sure? Schedule an appointment below and we can talk through it!

 

Unsure what steps to take to start up your payroll or just want someone to do it for you? We have a dedicated employee who works on payroll to help you through setting up your payroll or take over the day to day work of the payroll.

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