Is Your Independent Contractor Truly Independent?
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One of the most egregious misclassifications I see frequently in our industry is the 1099 "employee." The fact that I hear many refer to their independent contractors as 1099 employees is a true sign that these employers are getting it wrong. You're either an independent contractor or you're an employee. These two classifications aren't intended to be blended.
Here are the three common law rule categories you should look at:
- 1. Behavioral - Does the company control or have the right to control what the worker does and how the worker does his or her job? Do they have freedom in determining how their tasks are performed? Do they wear a company uniform? Are they free to explore other contracts/jobs? Is the person given training?
- 2. Financial - Are the business aspects of the worker's job controlled by the payer? Are they providing their own supplies? Paying for their own liability insurance? Are business expenses being reimbursed?
- 3. Type of Relationship - Are there written contracts or employee type benefits? Will the relationship continue, and is the work performed a key aspect of the business? Is the relationship going to be short-lived or a one-time project? Is the position one that the business requires permanently? Is the business providing health insurance, a retirement plan or PTO?
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