Employee vs. Independent Contractor

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Employee vs. Independent Contractor Determination

This is a list of 20 IRS Factors used to determine if a worker should be treated as an employee or an independent contractor. Check the factors that apply to the way you anticipate working with the individual.




1. Instructions  Is the worker required to comply with instructions about when, where, and how he or she is to work? (The right to give instructions is determinative rather then whether the employer actually gives instructions to a particular worker.) ________ _________
2. Training  Does the worker receive training from the employer? ________ _________
3. Integration  Is the worker integrated into the operations of the hiring firm? (If the services of the worker are necessary for the continuation or success of the business, the worker is generally integrated into the operations of the firm.) ________ _________
4. Services Rendered Personally  Is the worker required to render the services personally? ________ _________
5. Hiring, Supervising, and Paying Assistants  Are any assistants required by the worker hired by the firm? (If the worker hires assistants at the direction of the firm, the firm may be considered to be indirectly hiring the assistants.) ________ _________
6. Continuing Relationship  Is there a continuing relationship between the worker and the hiring firm? (If the arrangement with the worker contemplates continuing or recurring work, the relationship is permanent even if the services are part-time, seasonal, or of short duration.) ________ _________
7. Set Hours of Work  Does the hiring firm require the worker to work specific hours? ________ _________
8. Full Time Required  Does the worker devote substantially full time to the hiring firm? ________ _________
9. Doing Work on the Employer’s Premises  Does the worker work on the hiring firm’s premises or at a specific location designated by the hiring firm? ________ _________
10. Order or Sequence Set  Does the hiring firm set the order or sequence the services are to be performed? ________ _________
11. Oral or Written Reports  Does the hiring firm require the worker to submit regular oral or written reports? ________ _________
12. Payment by Hour, Week, Month  Is the worker paid by the hour, week or month rather than by commission or by the job? ________ _________
13. Payment of Business and/or Traveling Expenses  Does the hiring firm pay the worker’s business and/or travel expenses? ________ _________
14. Furnishing of Tools and Materials  Does the hiring firm supply tools and materials to the worker? ________ _________
15. Significant Investment  Has the worker failed to invest in facilities (such as an office) used to perform the services? ________ _________
16. Realization of Profit or Loss  Does the arrangement prevent the worker from realizing a profit or loss? (Factors indicating that the worker is assuming the profit/loss risk are liability for recurring expenses such as payroll, maintaining an office and equipment, and contracting to perform specific tasks at a set price.) ________ _________
17. Working for More than One Firm at a Time  Does the worker perform services primarily for one firm rather than working for multiple firms at one time? ________ _________
18. Making Services Available to the General Public  Does the worker, in fact, not make his or her services available to the general public? (Failure to maintain an office, have a business phone listing or advertise indicate that the worker’s services are not available to the general public.) ________ _________
19. Right to Discharge  Does the hiring firm have the right to discharge the worker? (An independent contractor cannot be fired as long as the terms of the contract are being fulfilled.) ________ _________
20. Right to Terminate  Does the worker have the right to terminate the relationship at any time without incurring liability? (An independent contractor is legally obligated to make good for the failure to complete a job.) ________ _________