Are your workers independent contractors or employees? If you classify them incorrectly, you could be in for some costly headaches and compliance issues. Rigzone has a few tips for distinguishing the two classifications:
- Right to Control – "Employees" are told by their employer when, where and how their job is to be done. "Contractors" may be told what the final result should be, but not how to get there.
- Integration – Employees' work is part of the employer's business operations. Contractors' work is separate from and often unrelated to the product or service of the employer's business. Having employees and contractors who perform the same tasks usually means the contractors are misclassified.
- Economic Dependency – Employees are usually dependent upon a single employer for their livelihood. Contractors are not, since they tend to work for a series of employers rather than for a single employer for an extended period of time or via a series of stints.
These are just a few of the factors employers have to take into consideration. If you are uncertain, please contact our CPAs. We can advise you on compliance issues with regard to employee classification.
To read more, see the full article from Rigzone.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.