CABL Forum - Misclassification of Independent Contractors &quot

Question: What Factors Does the IRS Look at in Determining Independent Contractor Status?
In the past, a "20 Factor Test" was used to evaluate workers to determine whether they were independent contractors or employees. These factors have been compressed into three general categories: Behavioral Control, Financial Control, and Relationship of the Parties. As you look at the factors below, you should be aware that the IRS does not look specifically at any one factor, but one factor can be enough to cause the IRS to determine that a worker is an employee. There is no "magic number" of factors which determines status. It is also important to remember that the IRS presumes

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Independent Contractor Test
As you look at the factors below, be aware that the IRS does not look specifically at any one factor, but one factor can be enough to cause the IRS to determine that a worker is an employee. There is no "magic number" of factors which determines status. It is also important to remember that the IRS presumes that a worker is an employee.

To give you more guidance on the issues relating to independent contractors vs. employees, here is a discussion of these factors:

1.Actual instruction or direction of worker. A worker who is required to comply with instructions about when, where and how to work is ordinarily an employee. The instructions may be in the form of manuals or written procedures that show how the desired result is to be accomplished.
"We are required to be at the shop at a certain time everyday, told we can not have Sat's off, have to submit a days off sheet and it is apporved or disapproved" "Told MANATORY SUNDAYS" 6-8 Apt's multi sometimes

2.Training Training of a worker by an experienced employee working with him by correspondence, by required attendance at meetings and by other methods is a factor indicating control by the employer over the particular method of performance.
"We are required to train new techs, manuals are provided to each new tech MSO manuals"

3.Integration of Services

Integration of the person's services in the business operations generally shows that he or she is subject to direction and control.
"Installations are the core buisness of the Prime"

4.Personal Nature of Services
If the services must be rendered personally, it indicates an interest in the methods, as well as the results. Lack of control may be indicated when the person has the right to hire a substitute with the permission or knowledge of the employer.
"Must be completed by you" IF YOU DROP THE ROUTE YOU GET BACKCHARGED

5.Similar workers
Hiring, supervising, and payments to assistants on the same job as the worker generally show employer control over the job.

"Only approved Techs are allowed on jobs, each person I use has to have a tech number, there own insurance and pay is split by Prime"

6.Continuing Relationship
The existence of a continuing relationship between an individual and the person for whom he or she performs services tends to indicate an employer-employee relationship.
"6 DAYS A WEEK"

7.Hours of work
The establishment of set hours of work by the employer bars the worker from being master of his own time, which is the right of the independent contractor.
"Report to get route, call everytime a jobs done, cant go home without calling Supervisor, normaly you have to pick up a job or to or you cant go home" Mostly 80 hours a week, 7:15am to 8-9pm. You know you always get a 6-8 appt

8.Full-time Work
Full-time work required for the business indicates control by the employer since it restricts the worker from doing other gainful work.
"Double full time"

9.Work on Premises
If the worker is required to do the work on the employer's premises, empoyer control is implied, especially where the work is of such a nature that it could be done elsewhere.
"MSO customers property"

10.Order of Performance
If the order of the performance of services is, or may be, set by the employer, control by the employer may be indicated.
"QC personal check Prime and MSO"

11.Submitting Reports
The submission of regular oral or written reports indicates control since the worker must account for his or her actions.
"Writeups for not showing up, etc"

12.Method of Payment
If the manner of payment is by the hour, week or month, an employer-employee relationship probably exists; whereas, payment on a commission or job basis is customary where the worker is an independent contractor.
"bi-weekly"

13.Payment of Expenses
Payment of the worker's business expenses by the employer indicates control of the worker.
"None" "Used to get gas every week"

14.Tools and Materials
The furnishing of tools, materials, etc., by the employer indicates control over the worker.
"Materails and Eequipment provided by Prime,MSO"

15.Investment
A significant investment by the worker in facilities used in performing services for another tends to show an independent status.
"None only our stuff"

16.Profit or Loss
The possibility of a profit or loss for the worker as a result of services rendered generally shows independent contractor status.
"We alwasy file for a loss"

17.Exclusivity of Work
Work for a number of persons at the same time often indicates independent contractor status because the worker is usually free, in such cases, from control by any of the firms.
"Cant advertises Cable and Telephone services, Cant have our sign's on trucks"

18.Available to General Public
The availability of services to the general public usually indicates independent contractor status.
"NO side work or any work for the MSO's customers, that means the entire county"

19.Right of Discharge
The right of discharge is that of an employer. An independent contractor, on the other hand, cannot be "fired" without incurring liability if he or she is producing a result that measures up to his contract specifications.
"Charge Backs, when you quit, they QC past work and Super's get the cash or there Asst's"

20.Right to Quit
The right to quit at any time without incurring liability indicates an employer-employee relationship.
"Were still respon for 1 year after the download date" Which means even if its not your fault, they charge you back"

"WE ALL EMPLOYEES BY THE LAW"

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Misclassification of Independent Contractors &quot