At-A-Glance: Benefits Eligibility

1. Determining whether a new worker is an employee or an independent contractor is crucial.
2. Whatever the arrangement, the understanding should be confirmed with proper documentation.
3. The business cost of hiring employees generally exceeds the cost of using independent contractors.
4. Penalties can be assessed for the improper classification of an independent contractor.
5. The IRS has established a 20-factor control test to determine whether a worker is an employee or independent contractor.
6. The law allows a measure of relief, in that it permits an employer to treat certain common law employees as independent contractors.
7. Professionals such as doctors, lawyers and accountants are generally not considered employees of the employer for which they perform services.
8. A business can protect the understanding that an individual is an independent contractor by having the individual sign an “independent contractor agreement.”
9. Leasing employees is becoming increasingly popular, as employers are struggling to keep benefits and payroll costs down.