Employee or Contractor
Lesson:
It should be pointed out that simply calling someone an employee or a contractor doesn't not make him so.
In fact, even the tax treatment you select doesn't necessarily make a person a contractor or employee. Some firms will intentionally misclassify worker in order to reduce their tax burdens, though such actions open companies up to significant fines and penalties.
This exercise will focus on general rules that hold in most cases. Remember that there are always intricacies and details that can create exceptions.
You can't decide if a worker is an employee or a contractor. Your decision could go either way, except for this one fact.
Here's what you know:
- The worker was given the equipment that she would need to perform the work.
Is the worker a contractor or an employee?
Answer:
- The worker is an employee.
Explanation:
-
Workers who are told when, where, and how to work are likely employees. Workers who have significantly more discretion are likely contractors.