Share this Page URL

Independent Contractors > Successful Use of the Independent Contractor, Part Th... - Pg. 109

Staffing Up 109 To get the gestalt of what the IRS is looking at, keep in mind that a major goal of the law distinguishing between employees and independent contractors is to prevent the exploitation of workers by com- panies looking to avoid paying the taxes, insurance, and benefits attached to employee status. The law is looking to establish that any persons classified as independent contractors do so voluntarily as part of a scheme to offer services to several entities, with adequate negotiating leverage to make the decision to be an independent contractor from preference and not necessity. Successful Use of the Independent Contractor, Part Two: The Contract While a written agreement will not necessarily protect a company from the reclassification of inde- pendent contractors, it is a necessary part of any independent contractor relationship. The independent contractor agreement should be signed before the contractor begins work and should detail: · The work to be performed. · The reporting relationship. · That the contractor will be working without supervision, on his own schedule, and has the option of working at the company office or not, and may use the company equipment or not, as the contractor prefers. · Responsibility and any personnel reporting to the independent contractor. · Milestones and time frame for completion of work. · Fees and timing of payments (which should be tied to successful milestone completion). · Provision of resources and equipment for completion of work. · Where work is to be performed.