Legal definition of an independent contractor

What if you are a independent contractor? What does independent contractor stand for? What laws protect independent contractors?

People such as doctors , dentists , veterinarians , lawyers , accountants , contractors , subcontractors , public stenographers , or auctioneers who are in an independent trade , business , or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The status of independent contractor carries with it many tax ramifications. Yet independent contractors generally qualify for more business deductions on their federal income taxes than do employees. See full list on legal -dictionary.

Congress and the states have enacted numerous laws geared toward protecting employees. Although not protected by law to the extent of an employee, an independent contractor has far greater control over elements such as work hours and work methods. Unlike most employees, an independent contractor may opt to work at night or on weekends, leaving weekdays free.

Moreover, although the other contra. The common-law doctrine of Respondeat Superior holds an employer liable for the negligent acts of its employee. Generally, under Common Law, the hiring party is not responsible for the Negligence of an independent contractor. The Restatement (Second) of Torts identifies a few exceptions to this rule. The hiring party may be liable when, owing to its failure to exercise reasonable care to retain a competent and careful contractor , a third party is physically harmed.

No consistent, uniform definition distinguishes an employee from an independent contractor. Also, when an independent c. Some statutes contain their own definitions. One comprehensive test that takes in. A worker who is required to comply with instructions about when, where, and how he or she must work is usually an employee. If an employer trains a worker—requires an experienced employee to work with the worker, educates the worker through correspondence, requires the worker to attend meetings, or uses other methods—this normally indicates that the worker is an employee.

Legal Definition of independent contractor. The person who hires an independent contractor is not liable to others for the acts or omissions of the independent contractor. Independent Contractor means an individual in the Service of the Employer if the relationship between the individual and the Employer is not the legal relationship of employer and employee.

An independent contractor (IC) is an individual who runs their own business. Independent contractors earn a living through their own businesses instead of relying upon employers to earn a living. In the United States independent contractors.

Presented by Howard B. Jackson, Member, Wimberly Lawson, Tennessee SHRM State Council Legislative Director. On September 2 the U. Department of Labor, Wage and Hour Division issued a proposed rule yet again modifying the definition of Independent Contractor. Facts that provide evidence of the degree of control and independence fall into three categories: 1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Financial: Are the business aspects of the worker’s job controlled by the payer? Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)?

Will the relationship continue and is the work performed a key aspect of the business? Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent cont. The form may be filed by either the business or the worker.

The IRS will review the facts and circumstances and officially determine the worker’s status. Be aware that it can take at least six months to get a determination, but a business that continually hires the same types of workers to perform particular services may want to consider filing the Form SS-8(PDF). Once a determination is made (whether by the business or by the IRS), the next step is filing the appropriate forms and paying the associated taxes.

Forms and associated taxes for independent contractors 2. There are specific employment tax guidelines that must be followed for certain industries. If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker (the relief provisions, discussed below, will not apply). Employment Tax Guidelines: Classifying Certain Van Operators in the Moving Industry(PDF) 2. If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal information returns on a basis consistent with your treatment of the worker.

For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes. Real Estate, Landlord Tenant, Estate Planning, Power of Attorney, Affidavits and More!

All Major Categories Covered. Instant Downloa Mail Paper Copy or Hard Copy Delivery, Start and Order Now! Register and Subscribe now to work with legal documents online. Workers can be classified as either an employee or an independent contractor.

When a worker is an independent contractor , the employer can control only the. A legal category of worker that is distinct and different from an employee. The key to the definition is that, unlike employees, independent contractors retain control over how they do their work. Employers are not required to withhold and pay federal, state, and Social Security (FICA) taxes on behalf of independent contractors , as they must do. For more information on your tax obligations if you are self-employed (an independent contractor ), see our Self-Employed Tax Center.

Contact the Frederick, M business law attorneys at Lusk Law LLC today. How to Classify an Independent Contractor Vs. The main consideration in determining whether a person is an employee or an independent contractor is the business relationship that you have with the person.

A principal contractor , when sued pursuant to the provisions of R. Chapter in accordance with R. The independent contractor -versus-employee primer seeks to give you a broad overview on worker classification. The general rule is that workers are considered to be independent contractors if the client controls only the result of the work that is done, not what or how it will be done. The law defines employment as a service performed by an individual for wages under an express or implied contract for hire, unless it is shown to the satisfaction of the Commission that the individual’s performance of the service has been and will continue.