The IRS has a video that helps employers determine if a worker should be considered an employee. All employers must understand how to treat payments made to workers for services and to do so, employers must first understand the business relationship with the worker performing services. Once the relationship is understood, employers can properly classify workers as employees or independent contractors.
In general, a worker’s classification is determined by applying a common-law standard analyzing the facts and circumstances concerning how the work is performed. While there is no set definition of independent contractor, generally such person ins a self-employed individual who is contracted to perform services for the organization and the individual controls the means and methods of accomplishing their tasks and projects.
Some who might be considered an independent contractor might actually be treated as a “statutory employee” according to definition. In other cases, an individual may be an employee because the person meets the IRS’s common-law factors to for an employee-employer relationship.
The provides helpful guidance on determining worker status. The IRS video, “Who is an Employee?” is particularly helpful for employers. To watch the video, click here.
