{"id":55420,"date":"2023-01-24T09:43:16","date_gmt":"2023-01-24T14:43:16","guid":{"rendered":"https:\/\/www.reviewob.com\/?p=55420"},"modified":"2023-01-24T11:38:30","modified_gmt":"2023-01-24T16:38:30","slug":"why-you-may-have-only-thought-you-hired-an-independent-contractor","status":"publish","type":"post","link":"https:\/\/reviewob.com\/why-you-may-have-only-thought-you-hired-an-independent-contractor\/","title":{"rendered":"Why You May Have Only THOUGHT You Hired an Independent Contractor"},"content":{"rendered":"

By Stuart Oberman, Esq.<\/strong><\/p>\n

\"\"<\/p>\n

Jan. 18, 2023<\/strong><\/p>\n

When faced with personnel decisions, a company, including your practice, may wish to retain the services of an individual as an independent contractor and not an employee.<\/p>\n

The reason for this decision could be economic, as it is often less expensive, in the long run, to hire and utilize the services of an independent contractor. You may pay a higher rate to an independent contractor, but those costs often balance out because the company is not responsible for the expense of providing benefits, workers’ compensation insurance, or employer tax payments, for an independent contractor.<\/p>\n

A practice may also decide to hire an independent contractor for flexibility. You can obtain the services of a highly qualified individual for a limited term-specific project or on a regular, but less than a full-time, basis. Additionally, independent contractors often require less training and supervision.<\/p>\n

However, just because you intend to hire an individual as an independent contractor, does not mean that the law will classify them as such. Each state and the federal government may have different laws, rules or criteria used to determine whether an individual actually qualifies as an independent contractor.<\/p>\n

Misclassifying an individual as an independent contractor when they fail to meet the required criteria may result in adverse financial consequences for your practice. Generally speaking, there is not a specific set of criteria or requirements which will apply in each and every situation which definitively governs the parties\u2019 relationship. Rather, each situation must be evaluated independently based on the specific facts and circumstances of the situation and the applicable law to determine the exact nature of the relationship.<\/p>\n

What Determines if Someone is an Independent Contractor or An Employee?<\/strong><\/span>
\nHistorically, the criteria which has been considered by the regulatory agencies in making the determination of an individual\u2019s employment status include: the amount of control an employer exercises over the individual; if the individual provides services for other clients; the level of education or training of the individual; if the individual provides their own equipment or tools; the timing of performance, for instance are specific hours required or is the focus on project completion; the terms of any written agreement between the parties; the length of time the individual has been engaged, whether it is for a specific term or open ended; and how essential the individual is to the continued operation of the employer\u2019s business.<\/p>\n

In general terms, the more autonomy an individual has in performing a job requiring a higher degree of skill or training, not provided by the employer, and the less control exercised by the employer, the more likely the individual will be classified as an independent contractor.<\/p>\n

Some States Have a Presumption of Employment
\n<\/strong><\/span>Some states, like Virginia and Georgia, have a presumption of an employee\/employer relationship which must thereafter be rebutted by the employer claiming that an individual is in fact an independent contractor. Other states, like California, also have a presumption of employment and have additional legal hurdles in place, which makes the classification of individuals as independent contractors instead of employees more difficult.<\/p>\n

To help determine that an independent contractor relationship exists, it’s best to draft accurate independent contractor agreements with qualified individuals that outline the project and\/or services to be performed by the contractor and then leave the contractor free to exercise control and direction as to how and when those services are performed.<\/p>\n

\n

Other Articles to Explore<\/h4>\n
The Service-Driven Sales Approach that Increased Our Revenue Per Exam 10%<\/span><\/a><\/p>\n

The Best Way to Break 3 Kinds of Bad News to Patients<\/span><\/a><\/p>\n

8 Steps to Avoid Trouble From Faulty Coding & Billing<\/a><\/span><\/div>\n<\/div>\n

<\/div>\n

20 Factors the IRS Uses to Classify Employee Vs. Independent Contractor<\/strong><\/span>
\nThe Internal Revenue Service (IRS)<\/strong><\/a> has published a list of 20 factors<\/strong> <\/a>that may be used in evaluating whether an individual would be considered an employee for the purposes of applying many different federal laws. These factors may also be used by other governmental entities in evaluating specific relationships.<\/p>\n

These factors include:<\/p>\n

How much control does the company have to compel an individual to follow the company\u2019s instructions?<\/p>\n

Is the individual provided with training to perform the required services in a particular manner?<\/p>\n

How much of the individual\u2019s work is incorporated or otherwise necessary for the continued operation of the company\u2019s business?<\/p>\n

Will the services will be rendered personally by the individual in question?<\/p>\n

Who is responsible for hiring, supervising and paying assistants; is there a continuing relationship?<\/p>\n

Are there set hours of work; is the individual required to work full time?<\/p>\n

Is the work required to be done on the company\u2019s premises?<\/p>\n

Does the company require the work to be performed in a specific order or sequence set?<\/p>\n

Are regular oral or written reports required?<\/p>\n

How are payments made to the individual? Are the expenses of the individual paid by the company?<\/p>\n

Who furnishes the tools and materials the person needs in order to do the assigned work?<\/p>\n

Is there a significant investment in the facilities where the work is performed? Is it possible for the individual to incur either a profit or loss on the project?<\/p>\n

Is the individual working for more than one client at a time? Does the individual usually make their services available to the general public?<\/p>\n

Can the company terminate the individual without restriction?<\/p>\n

Can the individual terminate the relationship without penalty?<\/p>\n

Each of the above factors should be evaluated and looked at to see who they favor. If the employer has more control over how, when and where the particular tasks comprising the work are done and how payments are made, the more likely the individual will be considered an employee.<\/p>\n

If, on the other hand, the individual performing the work assignment has control over how, when and where the work is done and compensation rendered, then it is more likely the individual will be classified as an independent contractor.<\/p>\n

The federal government may be making changes to the criteria or factors which may be considered in evaluating the nature of the relationship between a company and individual in the near future.<\/p>\n

Due to the potential liability in misclassifying employees as independent contractors, businesses should take great care in determining the applicable standards and ensuring that the specific facts and circumstances meet those standards.<\/p>\n

If there are any questions as to whether a particular individual would qualify as an independent contractor, it is strongly recommended that you consult with legal counsel.<\/p>\n

\"\"Stuart Oberman, Esq.<\/strong>, is the founder and president of Oberman Law Firm<\/strong><\/a> in Cumming, Ga. To contact him: stuart@obermanlaw.com<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Ensuring your independent contractors are legally considered “independent.”<\/p>\n","protected":false},"author":544,"featured_media":41328,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[90],"tags":[1094,8155,1564,273,3776,8154,2815,485,4461,81,7669],"yoast_head":"\nWhy You May Have Only THOUGHT You Hired an Independent Contractor - Review of Optometric Business<\/title>\n<meta name=\"description\" content=\"Tips for optometrists in whether they should classify an individual who works for them as an employee or independent contractor.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/reviewob.com\/why-you-may-have-only-thought-you-hired-an-independent-contractor\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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