| 2090 : Independent Contractors |
| To read the full version, click the Read Memo button >> |  |
|
Memo 2090-1-4: Independent Contractors
TABLE OF CONTENTS
INDEPENDENT CONTRACTORS AND EMPLOYEES
INDEPENDENT CONTRACTORS MUST BE TRULY INDEPENDENT
RULE ONE: INDEPENDENCE FROM EMPLOYERS' CONTROL
RULE TWO: ECONOMIC INDEPENDENCE
COLLECT RECORDS TO PROVE IC STATUS
EMPLOYER MUST REPORT PAYMENTS
LEGAL CONSEQUENCES
RELATED MEMOS/FORMS
| QUESTIONS |  | When are workers independent contractors instead of employees? | | Are independent contractors covered by employment laws? | | Is a company responsible for the negligent acts of its independent contractors? | | Does a company have the right to discharge independent contractors without cause? | | May a company require an independent contractor to personally do the work? | | Can a company supervise how, when, and where independent contractors work? | | View all questions for this Memo |
INDEPENDENT CONTRACTORS AND EMPLOYEES |
 |
Generally, when people are hired to perform services, they are either employees or independent contractors (ICs).
Note: Under certain conditions, people volunteering their services or involved in training programs may not qualify as either employees or independent contractors. See Memo 2130 Volunteers in For-Profit Organizations, Memo 2133 Volunteers in Non-Profit Organizations, Memo 2140 Unpaid Trainees, and Memo 2150 Students & Vocational Trainees.
Note: To learn more about employees and non-employees, read Memo 1680 Definition of Employer and Memo 1700 Definition of Employee.
It's essential for companies to know which of their workers are employees and which are independent contractors. Otherwise, companies may face significant penalties.
Unfortunately, there is no single test to determine whether a worker is an IC or employee. Instead, the determination is made on a case-by-case basis by the particular government agency reviewing the matter. And, each agency uses its own factors.1
|
|
|
|
|
| END OF PREVIEW To read the full version, click button >> | |
|