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Independent Contractors Quick Training

Keep This in Mind

  • The Department of Labor and the IRS take employee classification very seriously. Misclassifying an employee as an independent contractor can lead to fines for USU.
  • The decision to classify someone as an independent contractor must come from HR.
  • What to Know

  • Employees vs. Independent Contractors:
    • Employees:
      • Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. (Source: IRS Website)
      • Employees tend to:
        • Use company tools/equipment
        • Work exclusively with one company
        • Defer to the employer control over means and methods to accomplish results

    • Independant Contractors
      • People such as lawyers, contractors, subcontractors and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees. However, whether such people are employees or independent contractors depends on the facts in each case. (Source: IRS Website)
      • Independent Contractors tend to:
        • Use own tools/equipment
        • Work with other businesses as well
        • Have control over means and methods to accomplish results

  • Ask: who controls the work of this individual?
    • Whose equipment will be used?
    • Do they have their own business? Do they work for others as well?
    • Do they control how the work gets done?

  • Final Decision rests with HR
IRS Website with more information: