I have discovered that a vast majority of business owners have been improperly classifying their worker or builders, which might create serious trouble down the road. We answer this question by taking a look at substance over form, i.e. the true job, not what responsibilities are composed on paper.
If you browse the IRS website, you'll find that the IRS sets forth a general principle for specifying an independent contractor. The IRS website says "that the rule of thumb is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work rather than what'll be achieved and how it'll be done." This is a very broad definition and can be subject to interpretation. Further, the IRS site states "that you aren't an independent contractor if you perform services which may be controlled by an employer (what'll be done and how it will be performed). This applies even if you're given freedom of activity. What's that the company has the legal right to control the details of how the services have been done." Again, this can be subject to interpretation.
So as a business owner, how can you be sure that you are classifying your workers properly to avoid any unforeseen legal difficulties Skip Trace Search? You must look at the details of each situation, what the worker's job really is composed of. A few of the aspects to consider are: that directs the individual's work? Does he/she have a boss or work independently? Do you supply the equipment required for the job or does the employee? How are they paid? Are any benefits provided to them? Are they needed to report to someone or merely supply a completed product? One example I'd like to use when seeking to differentiate between an employee and an independent contractor is as follows: Let us say you need your house painted. You hire a painter to perform it. You tell the painter they need to paint between 9:00am and 5:00pm, and they can have an hour lunch and you'll offer the equipment to the job. You will pay them for several hours worked. This painter will probably be deemed your worker. On the other hand, you hire a painter to paint your house. You pay $3,000 for materials and labor and just care that the job is complete in two weeks. This painter will probably be deemed a builder. Please know that this is only such as and is in no way intended to opine on the painting profession.
As you can probably tell, this is a very grey area of the law, however, one in which includes high penalties if not managed properly. Whether you are employing independent contractors or employees is a factual question, a question which should be answered from the start to avoid long-term trouble. Do not take this lightly. As a business owner, you ought to be working with competent legal counsel to aid in the analysis and to save you money in the long term.
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