4 ms·

Can you elaborate on that last part?

by Crinus 7y ago

taftster 7y ago
For example, in the United States, the IRS applies a set of tests to determine if a person can be considered a 1099 contractor or a W2 employee. In the US, the primary determination is if the contractor can set their own schedule and client list. Also if the contractor can determine the best way to perform a task or get to a result. It's an interesting take in the context of remote work, for sure. I couldn't find the direct IRS link, but this looks official enough to reference: https://galachoruses.org/sites/default/files/IRS-20-questions-W2-vs-1099.pdf https://galachoruses.org/sites/default/files/IRS-20-question...
- Spooky23 7y ago
  This is a big one, but don't forget about Worker's Compensation. When your "contractor" gets hurt when working/travelling/etc at your direction, the "contractor"'s health or auto insurer will likely figure out that the contractor meets the test to be an employee and will pursue action against the company.
paulmd 7y ago
Contractors essentially need to be entirely piecework - I am paying you to accomplish this task, by this date, end of story. If the employer attempts to impose conditions on how the work is done, or when it is done (in terms of working hours, etc) then those are characteristics which point towards the contractor actually being an employee of the company.
PeterisP 7y ago
The difference between an employee and an independent contractor isn't an arbitrary choice that the company and worker can contract as they wish. If the de-facto nature of the interaction is that of an employee, then (mis)classifying that as a contractor relationship is generally illegal; the specifics depend on the jurisdiction (which is especially tricky if you have people in many jurisdictions) but it may be considered tax fraud because you're not reporting/paying taxes in the way employment requires, it may be considered violation of worker's right laws, etc. If you're treating your remote workers as independent contractors, then you have to treat them as independent contractors - i.e. they can sell their services also to other employers at the same time, they can set their own hours, they can choose how they achieve the goals and possibly (this may depend on location) subcontract their work instead of doing it themselves, etc.

Can you elaborate on that last part?

by Crinus 7y ago

Can you elaborate on that last part?

For example, in the United States, the IRS applies a set of tests to determine if a person can be considered a 1099 contractor or a W2 employee. In the US, the primary determination is if the contractor can set their own schedule and client list. Also if the contractor can determine the best way to perform a task or get to a result. It's an interesting take in the context of remote work, for sure. I couldn't find the direct IRS link, but this looks official enough to reference: https://galachoruses.org/sites/default/files/IRS-20-questions-W2-vs-1099.pdf https://galachoruses.org/sites/default/files/IRS-20-question...

Spooky23 7y ago
This is a big one, but don't forget about Worker's Compensation. When your "contractor" gets hurt when working/travelling/etc at your direction, the "contractor"'s health or auto insurer will likely figure out that the contractor meets the test to be an employee and will pursue action against the company.

paulmd 7y ago

Contractors essentially need to be entirely piecework - I am paying you to accomplish this task, by this date, end of story. If the employer attempts to impose conditions on how the work is done, or when it is done (in terms of working hours, etc) then those are characteristics which point towards the contractor actually being an employee of the company.

PeterisP 7y ago

The difference between an employee and an independent contractor isn't an arbitrary choice that the company and worker can contract as they wish. If the de-facto nature of the interaction is that of an employee, then (mis)classifying that as a contractor relationship is generally illegal; the specifics depend on the jurisdiction (which is especially tricky if you have people in many jurisdictions) but it may be considered tax fraud because you're not reporting/paying taxes in the way employment requires, it may be considered violation of worker's right laws, etc. If you're treating your remote workers as independent contractors, then you have to treat them as independent contractors - i.e. they can sell their services also to other employers at the same time, they can set their own hours, they can choose how they achieve the goals and possibly (this may depend on location) subcontract their work instead of doing it themselves, etc.