Alex What are the different laws for independent contractors?
Whether an individual is an employee or independent contractor (IC) is relevant to many different laws, including tax laws, wage and hour laws, unemployment compensation laws, and workers’ compensation laws.
What happens if you misclassify an employee as an independent contractor?
Under the Law. The rules surrounding whether a worker is an employee or independent contractor are complex. But it’s important to get it right, because when you misclassify an employee as an independent contractor, you open the door to significant legal and financial troubles.
What are the pros and cons of being an independent contractor?
While being an independent contractor comes with advantages over being an employee, there are drawbacks, as well. It’s best that all workers, especially those considering independent contract work, understand the pros and cons of this classification. As an independent contractor, you are your own boss.
Are there minimum wage requirements for independent contractors?
NYC Changes the Rules. Normally, independent contractors are not subject to minimum wage requirements, since those laws (such as the Fair Labor Standards Act) apply only to employees.
When does an individual become an independent contractor?
An individual is an independent contractor if an employer can prove ALL three of the following criteria: The individual is free from control and direction in performing their job. The individual is performing services outside the usual course of business for the employer.
Under the Law. The rules surrounding whether a worker is an employee or independent contractor are complex. But it’s important to get it right, because when you misclassify an employee as an independent contractor, you open the door to significant legal and financial troubles.
How can I tell if my independent contractor is an employee?
You should receive invoices, and payment checks should be written to the business name — never the individual. Further, it helps your case if the worker has an Employer Identification Number (EIN) for tax purposes. The worker only works for you: Independent contractors typically work with multiple clients.
What to avoid when working with independent contractors?
Don’t prohibit the IC from using subcontractors. Don’t let the IC work at your offices unless the nature of the services absolutely requires it. Don’t give the IC employee handbooks or company policy manuals. Don’t establish the IC’s working hours. Avoid giving ICs so much work or such short deadlines that they have to work full time for you.