HR Support on Independent Contractors

Editor's Note: Give up control to avoid taxes and other employment headaches.

Michael CardmanOverview: Having independent contractors offer benefits and risks. The benefits include avoiding certain taxes, legal liabilities and administrative challenges.

However, the risks can be great. Before filling a position with an independent contractor, it is essential to carefully consider the myriad factors that go into proper employee classification a worker as an independent contractor. An independent contractor should qualify not only under the tax code, but also several other state and federal employment laws that may come into play. Inaccurately classifying someone as an independent contractor can set an employer up for costly enforcement actions. 

Trends: Government enforcement of independent contractor misclassification is stricter than ever, as the Internal Revenue Service, the U.S. Department of Labor and state agencies cooperate to enforce the laws.

Author: Michael Cardman, Legal Editor

Latest items in Independent Contractors

  • Alabama Teaming Up With Feds to Pursue Employers That Misclassify Independent Contractors

    Date:
    07 October 2014
    Type:
    News

    Alabama is the 16th state to join the US Department of Labor's Misclassification Initiative, following California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington.

  • IRS Revises SSN Verification Procedures to Avoid Backup Withholding

    Date:
    11 August 2014
    Type:
    News

    Newly revised IRS procedures allow independent contractors to stop or prevent backup withholding on reportable employer payments by validating and presenting a Social Security card to an employer.

  • Recruiting: Maine

    Type:
    Employment Law Manual

    In-depth review of the spectrum of Maine employment law requirements HR must follow with respect to recruiting.

  • Classify a Position as Exempt or Nonexempt

    Type:
    Liveflo

    Use this workflow to determine if an employee is exempt or nonexempt from the minimum wage or overtime requirements of the Fair Labor Standards Act (FLSA).

  • Recruiting: Virginia

    Type:
    Employment Law Manual

    In-depth review of the spectrum of Virginia employment law requirements HR must follow with respect to recruiting.

  • New Tools Now Available for Hiring and Managing Independent Contractors

    Date:
    06 May 2014
    Type:
    Editor's Choice

    XpertHR is pleased to announce the addition of three new How To's, a sample independent contractor agreement, a documentation checklist and an internal independent contractor policy to help employers hire and manage independent contractors.

  • Confirmation of WHD Administrator Could Spell Trouble for Franchisors, Employers of Independent Contractors

    Date:
    29 April 2014
    Type:
    News

    David Weil is expected to continue the Wage and Hour Division's policy of targeting enforcement efforts at what he calls "fissured industries," in which the use of franchising, independent contractors, subcontracting and third-party intermediaries such as temporary employment agencies or labor brokers has distanced employers from their workers.

  • How to Reclassify an Independent Contractor as an Employee

    Type:
    How To

    Legal actions may result in an order or settlement requiring an employer to reclassify certain workers as employees. An employer also may voluntarily decide to reclassify certain workers for other business reasons. An employer should follow the steps in this How To to reclassify an independent contractor or group of independent contractors as employees.

  • How to Manage an Independent Contractor

    Type:
    How To

    To manage independent contractors effectively, an employer should set clear expectations about the project's scope, budget and timeline; keep the lines of communication open; and pay independent contractors promptly so that they will want to do business again. An employer should avoid actions that could result in a reclassification of the parties' relationship. After hiring an independent contractor, an employer should consider following the steps set forth in this How To.

  • How to Hire an Independent Contractor

    Type:
    How To

    Hiring independent contractors can provide an employer with cost savings in salary and benefits and give staffing flexibility to address temporary projects or demands. When deciding to hire an independent contractor, an employer should follow the steps in this How To.

About this topic

HR guidance on legally classifying and managing independent contractors under federal tax and employment laws.