|Hire and Manage Employees||| Print ||
Most businesses today start as self-employment. The entrepreneur chooses the type of business to start develops a business plan and secures financing. The business owner may serve as manager, marketer and manufacturer. If the initial efforts to grow the business are successful, hiring employees becomes a necessity regardless of how motivated the entrepreneur may be.
If your company grows to the point where help is needed, it is important to understand which workers are classified as independent contractors and which are employees. In making these determinations for federal tax purposes, the IRS and the courts typically look at three main categories: behavioural control, financial control and the relationship between parties. Factors such as instructions, training, and method of payment, employee benefits, and the workers opportunity for profit and loss are all considered.
For more information, go to the IRS web site at www.irs.gov and download Publication 1779 (Independent Contractor or Employee). In workers compensation, the key factors to consider in determining whether a worker is an independent contractor or an employee include the right of the alleged employer to hire and fire the worker, to direct the manner of the workers performance or, to control the work to be completed.
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