Sharing is Caring - Employee vs Independent Contractor

A very common issue small business owners, accountants, and human resources professionals run across all the time is whether a worker is an employee or an independent contractor. Most businesses prefer to classify workers as independent contractors, primarily because it's cheaper on their payroll taxes. The reality is whether you pay a worker with a paycheck or a regular check does not determine if a person is an employee or independent contractor. Many government agencies and insurance companies have their own methods in determining if a worker is an employee or not. This article is great in that it goes through the concepts that many agencies use in making their determinations.

If a person is technically an employee and you disagree, you could be exposing yourself to a great risk. If you have independent contractors that you work with regularly, then I recommend you consult a professional. For example, the IRS offers templates and will review information you submit to make a determination.

Click this link to read the full article on the factors used in determining if a worker is an employee or not.