The Department of Labor and the Internal Revenue Service work together to identify organizations misclassifying employees as independent contractors. There are a few best practices to be aware of in order to protect yourself against fines. See the ones identified below.
- An independent contractor should be licensed and incorporated.
- An independent contractor should have their own clients and other contracts besides yours.
- There should be a contract with your organization and the independent contractor.
- The independent contractor should be paid per project.
- The independent contractor should furnish you with an invoice on their own letterhead for services rendered.
- The organization should not provide specific directions nor have control over what the contractor does to perform the job.
- Avoid setting hours for the contractor or paying any benefits to the contractor.
- Do not have the contractor clock in or out.
- The contractor should furnish their own equipment to perform the service. If this is not possible spell out what will be provided in the contract.
These are just a few guidelines and if your organization has any questions as always check with your human resources department or your legal counsel.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.