Masonry Magazine October 2001 Page. 33
As a contractor making his or her way in today's business world, the decision whether to bring a new worker on as an employee or independent contractor is one that shouldn't be taken lightly. The wrong choice now can provide potentially serious problems for the owner and company later on down the road. But the problem is that it's sometimes not easy to draw a clear distinction between the two classifications. The definition as to what constitutes an employee and what makes an independent contractor can often prove ambiguous and murky. Even the IRS itself has applied its own rules inconsistently at times... doing nothing to lessen the overall level of confusion.
But like it or not, the owners will always be held ultimately responsible for the people they hire and if in the eyes of the IRS an employee must be reclassified, there can be serious financial repercussions. The reclassification of an existing independent contractor to employee status may not only create assessments (and eventually pay-out) of the newly-reclassified employee's share of payroll taxes, fringe benefits, insurances, and more, but could also inflict onto the owner additional interest and/or penalty charges. Nothing is sacred. Even a qualified pension plan could fall prey to attack if "employees" (who they had mistakenly treated as independent contractors) were excluded from the plan's coverage. All-in-all, a potentially scary situation.
A CHECKLIST
So, it pays to be cautious. But you're not clear on the rules so where do you go for assistance? Well, the good news is that there is help available to the average contractor/owner. A while back, the IRS published a list of considerations a checklist of sorts that employers can use as a guidelines when attempting to determine whether the worker they're considering is technically an employee or independent contractor. The documents are published by the Department of Treasury and offer vast and detailed information regarding employee and independent contractor description and classification. And if you own a computer, these documents are readily accessible. At the time of this writing, I was able via the internet to access, view, and even download for printing most all of them for free. I located them at:
* irs.gov/bus_info/training.html
* irs.gov/bus_info/sm_bus/operating.html
* ftp.fedworld.gov/pub/irs-ufl/emporind.pdf
And there are more sites. You'll find that once you land on one of these sites, you'll have the option of branching off into a number of different directions. Simply read the instructions and click onto the links that you find appropriate for your question. Eventually you'll find what you're looking for. Particularly helpful for me was the IRS's Training packet #3320-102 "Independent Contractor or Employee - Training Materials". This packet pretty much answered any question I had regarding the independent contractor versus employee debate. But if these addresses don't take you to where you want to go (or be-
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