Employee vs Independent Contractor
2020 – 12/30 When determining whether to classify a worker as an employee or an independent contractor, the IRS and the courts look at several factors. They include: 1) the degree of control exercised by the business over the work details; 2) which party invests in the facilities used in the work; 3) whether the worker has the opportunity for profit or loss; 4) whether the work is part of the regular activities of the business; and 5) the relationship’s permanency. No one factor is more important than the others, and all facts and circumstances are considered. The extent to which a business can exercise control over a worker is a critical factor in determining the nature of a working relationship.