The Questions regarding an Independent Contractor

This is taken from the 20 questions that can be used to test if a worker is either an employee or an independently employed person. This information is to be considered a GUIDELINE and may not apply to your circumstances. Always consult, personally, with a qualified accountant or attorney when dealing with important tax issues.

The Questions:

1. Does the principal provide instructions to the worker about when, where, and how he or she is to perform the work?
2. Does the principal provide training to the worker?
3. Are the services provided by the worker integrated into the principal's business operations?
4. Must the services be rendered personally by the worker?
5. Does the principal hire, supervise and pay assistants to the worker?
6. Is there a continuing relationship between the principal and the worker?
7. Does the principal set the work hours and schedule?
8. Does the worker devote substantially full time to the business of the principal?
9. Is the work performed on the principal's premises?
10. Is the worker required to perform the services in an order or sequence set by the principal?
11. Is the worker required to submit oral or written reports to the principal?
12. Is the worker paid by the hour, week, or month?
13. Does the principal pay the business or traveling expenses of the worker?
14. Does the principal furnish significant tools, materials and equipment?
15. Does the worker have a significant investment in facilities?
16. Can the worker realize a profit or loss as a result of his or her services?
17. Does the worker provide services for more than one firm at a time?
18. Does the worker make his or her services available to the general public?
19. Does the principal have the right to discharge the worker at will?
20. Can the worker terminate his or her relationship with the principal any time he or she wishes without incurring liability to the principal?

Hopefully, questions 1 to 14, 19 & 20 should be answered NO, and the rest should be yes. This would tend to make the person an independent contractor rather than an employee.

Additionally you might consider:

• Is the worker engaged in a separately established occupation or business?
• In this locality, is the work usually done under the direction of the principal without supervision?
• Is skill required in performing the services and accomplishing the desired results?
• Do the parties believe they are creating an employer/employee relationship?

Another site with this info:

PBS Tax Tips

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