How Do I Classify My Employees Correctly?

To know the difference between an independent contractor and an employee, take the 20-factor test, developed by the Internal Revenue Service. It determines the extent of control you have over the individual.

Understand, too, that you are an independent contractor’s client. Although your company doesn’t withhold federal, state, and Social Security taxes or pay unemployment or workers’ compensation insurance, it does expect a finished product. If you have questions, consult your human resources department.

Don’t make your company vulnerable by making incorrect assumptions.