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I don't know how it works in the US. In Canada, if a business hires someone on contract but they are not in an "arms-length" transaction (ie. the 'contractor'
by mattm 16y ago
I don't know how it works in the US. In Canada, if a business hires someone on contract but they are not in an "arms-length" transaction (ie. the 'contractor' is working in their office, using their equipment for more than a 'temporary' period of time), then the Canadian Revenue Agency can force the business to re-classify them as an "employee" causing both the person and company to pay back-taxes and any penalties.
- noodle 16y agoi honestly don't know the details of the current US laws, but i do know that i've worked in a team with reasonably permanent, in-house contractors before.
- e40 16y agoAnd that company was likely breaking the law in the state in which they operated. If CA, MA, WA, or most others. CA and many other states are now going after companies that hire contractors to do the work that is usually done by employees (and they use their own definition of "employee", too). They will hit you with fines and back employment taxes should you be audited. How would you be audited? A contractor files for unemployment, to which they are not entitled (because unemployment taxes are not paid for them). It happens all the time.
- jcl 16y agoIt is the same in the US: http://www.google.com/search?q=irs+independent+contractor+test http://www.google.com/search?q=irs+independent+contractor+te...