Carpet store client has an employee (inside sales) and also pays this person to do other work as an ind contractor (measures for installation) - this is a no no (in our state anyway workers comp will ALWAYS re-classify as employee!) - does anyone have a cite or reference source on this particular issue? Thanks in advance....
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Why not complete an SS8
and let IRS determine if he's an employee or an independent. I have a situation right now where a client is an employee and a 1099 worker at the same place. Maybe, but I don't think so. I'm having him complete the SS8.
Similar situation with my brother. Has been a W2 for more than 10 years. New company took over andm ade every one an independent contractor. An SS8 will be done next year to determine. Now, I am doing estimates for 2011.
Will be interesting to see what others advise.
Peachie -
What are the odds of an company continuing to work with an independent contractor who files an SS-8 challenge against them? It always struck me as the sort of thing that's only filed by people planning on ceasing work for the company.Comment
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You can try Circular E, Pub 15, page 8. "Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done." Also continue further on page 9, ...."you will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a non-employee." The company would be hard-pressed to make a good case to treat wages as employee wages, and installations as paid to an independent contractor who is the same person. Does worker have a separate contract with them for installs? Does worker make his own schedule? Does he set the prices? Does worker do this for other businesses?Comment
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Thanks
Burke thats what I was looking for...........Comment
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I can't speak for how individual state laws may affect things, but in general I know of nothing in the IRS/SSA rules that keep a person from ever being both an employee and an independent contractor of the same employer at the same time. Imagine, for example, a small store hiring a young student a clerk (employee) but also to produce a web site (contractor).
I recently had windows installed through a major chain. The installer contacted us directly and was clearly responsible for his own schedule, his own tools, and I'm guessing his own hiring and employment of assistants. I believe he did all his work for this one chain. On the other hand, we never discussed installation costs with hin. I have no idea whether he is treated by the chain as an employee or independent contractor, but I believe a case can be made for either.Comment
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Yes, often Lowe's & Home Depot, etc. contract with outside installers. But as far as I know, they are not usually employees of these same firms as well. I see no reason why it could not be done, however, as long as the rules for independent contractors are followed, the key being under whose control is the work.Last edited by Burke; 03-01-2011, 08:51 PM.Comment
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