What happens if you treat a contractor like an employee?

What happens if you treat a contractor like an employee?

An employer that is found to have misclassified an employee will be required to pay any back taxes and back wages that are owed to the IRS and to the employee. It’s pretty rare to be fined for misclassification, although employers may be penalized if they fail to pay the back taxes and wages they owe.

Can an independent contractor hire employees?

Independent contractors frequently have power to delegate work to others, either with or without the consent of the party contracting their services, by either recruiting his or her own employees, or subcontracting the work to others.

What does it mean to be hired as a contractor?

Congratulations! But who the heck am I working for? You’re being hired as a ‘contract’ employee and not a ‘regular’ employee. What does that mean to you?

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 do you need to know about hiring a contract employee?

If you’re hiring a contract employee from outside the US, then you need to send them a W-8 form to fill in to report their independent contractor taxes instead of a W-9. If you hire a contractor as opposed to a salaried employee, you don’t have to pay benefits or worry about paying minimum wage.

What’s it like working as a contractor thru a staffing agency?

As a contractor assigned to work at ABC Company, you will take direction from them about the specific work they need you to do. As an employee of the staffing agency, you’re expected to let them know when you are too ill to go to work, need to take personal time off, or have a vacation planned.

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