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How does the courts differentiate between an employee and and independent contractor?
Wiki User
∙ 12y ago
Courts don't make the decision, law does.
There are federal DLSE/Dept of Labor Standards and Enforcement, IRS rules, and state mandates providing the definition of independent contractor vs employee.
Generally, if you are an employee, you would see tax deductions on your check stubs, and a W-2 at the end of the year.l
If you are a valid/legal independent contractor, you would receive a 1099. There are very specific rules for both.
The answer above is wrong in every way. Courts often need to rule on whether worker X was an employee or not. How the employer pays you is irrelevant to decisions about whether a worker is an employee. IRS and USDOL rules are the factors that courts follow.
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∙ 12y ago
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What is the difference between independant contractor and employee?
An independent contractor is someone who works for themselves not a company. They can work for someone else but not be employed by them. An employee is employed by a company.
What is the difference between a vendor and an independent contractor?
An independent contractor is a hired individual who is not an employee and works at a set price. A vendor is a person or group that sells products or services independently.
Why is it important to make a distinction between an employee and an independent contractor?
An employer can be vicariously liable for the torts committed by an employee while they are in the scope of their employment in certain situations. An employer will not normally be held vicariously liable for the torts of an independent contractor because of a lack of supervisory control.
How much does a certified massage therapist make an hour in a chiropractic office?
It depends on whether you are working for them as an independent contractor or an employee. If you are an independent contractor you usually work by a percentage rate. That can range between 40-60%/ If you are and employee you may work at an hourly rate. You could expect to get anything from $12-$20 per hour.
What is the difference between an employee and an independent contractor?
A small business person may be an independent contractor, meaning only that he or she sells services for a fee, as opposed to being an employee (which is distinctly not "independent"). An independent contractor refers to anyone selling you services (often a corporation or LLC, but also any small business), as long as it is not a joint venture or employment relationship.
What is economic reality test?
The economic Reality Test is a test used by courts to further determine between an employee and an independent contractor. They use this mainly to determine if payroll taxes should have been paid on a person working for a business. If the contractor end up being classified as an employee, the business owes payroll taxes on the money paid to that person. If the person is determined to be an independent contractor, then the person owes income taxes on the money paid to them.
What is the difference between an Independent contractor and an employee?
That is based on weighing several factors - sometimes the difference is clear sometimes a close call. What DOES NOT matter? The intention of the worker and the boss and what they call the worker. Saying you are a contractor does not make you one. Factors: Does the boss direct the manner and speed of accomplishing the work? The worker is probably an employee. Does the worker provide his/her own tools and supplies, and support devices like phones, computers, and fax. probably a contractor. Does the boss supervise other workers doing exactly the work the "contractor" does? The contractor is just another employee. Is the worker paid for COMPLETING a task, not just for working on it? Probably a contractor. Paid for working even if completion not reached - probably an employee. Is the workers entire pay at risk - no completion, no pay? That's a contractor. Is the worker's pay assured despite quality of work - that's an employee until fired.
Is a person a subcontractor if the general contractor makes the price?
Anyone who does work for a general contractor and is not a direct employee of that contractor is a sub-contractor. Regardless of who sets the price. The subcontractors work within the contract set between the general contractor and homeowner. Hence sub-contractor.
Your roommate is independent contractor who receives her clients and paycheck through another company should she be reimbursed for her time during travel as well as mileage between clients?
No, not if she's and "independent" contractor, the company just gets clients for her and takes their cut of her pay.
Differentiate between general and specific reserve?
differentiate between general and specific reserve?
Are you required to attend weekly meetings as an independent contractor?
no, see belowIndependent Contractor (Self-Employed) or Employee?It is critical that you, the business owner, correctly determine whether the individuals providing services are employees or independent contractors. Generally, you must withhold income taxes, withhold and pay Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee. You do not generally have to withhold or pay any taxes on payments to independent contractors. If you are an independent contractor and hire or subcontract work to others, you will want to review the information in this section to determine whether individuals you hire are independent contractors (subcontractors) or employees.Before you can determine how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. The person performing the services may be -An independent contractorAn employee (common-law employee)A statutory employeeA statutory nonemployeeIn determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.Common Law RulesFacts that provide evidence of the degree of control and independence fall into three categories:Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?Financial: Are the business aspects of the worker's job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no "magic" or set number of factors that "makes" the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another.The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.Form SS-8If, after reviewing the three categories of evidence, it is still unclear whether a worker is an employee or an independent contractor, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF) can be filed with the IRS. The form may be filed by either the business or the worker. The IRS will review the facts and circumstances and officially determine the worker's status.Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8 (PDF).Employment Tax ObligationsOnce a determination is made (whether by the business or by the IRS), the next step is filing the appropriate forms and paying the associated taxes.Forms and associated taxes for independent contractorsForms and associated taxes for employeesMisclassification of EmployeesConsequences of Treating an Employee as an Independent Contractor If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). See Internal Revenue Code section 3509 for more information.Relief Provisions If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977. See Publication 1976, Section 530 Employment Tax Relief Requirements (PDF) for more information.Misclassified Workers Can File Social Security Tax FormWorkers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee's share of uncollected Social Security and Medicare taxes due on their compensation. See the full article Misclassified Workers to File New Social Security Tax Form for more information.References/Related TopicsProper Worker Classification (Audio, Transcript)Worker Classification WebcastA critical issue for all businesses is properly classifying workers as employees or independent contractors. The IRS's archived Tax Talk Today Webcast, "What's Hot in Employment Taxes: Independent Contractor or Employee?," focuses exclusively on worker classification issues.IRS Internal Training: Employee/Independent Contractor (PDF)This manual provides you with the tools to make correct determinations of worker classifications. It discusses facts that may indicate the existence of an independent contractor or an employer-employee relationship. This training manual is a guide and is not legally binding.Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding (PDF)Publication 15-A, The Employer's Supplemental Tax Guide (PDF) has detailed guidance including information for specific industries.Publication 15-B, The Employer's Tax Guide to Fringe Benefits supplements Circular E (Pub. 15), Employer's Tax Guide, and Publication 15-A, Employer's Supplemental Tax Guide. It contains specialized and detailed information on the employment tax treatment of fringe benefits.Businesses with EmployeesHiring EmployeesWho Is Considered Self-Employed?http://www.irs.gov/businesses/small/article/0,,id=99921,00.htmlJosh HarmatzVoyage Financial Group
How much do cable guys make?
Cable guys make between $40,000 and $100,000
