Hiring Independent Contractors : The Employer's Legal Guide

by Fishman, Stephen; Delpo, Amy

• ISBN13: 9780873379182
• ISBN10: 0873379187
• Edition: 4th
• Format: Paperback
• Copyright: 2003-06-01
• Publisher: Nolo

Summary

Hiring an independent contractor can result in repercussions with the IRS if employers aren't careful. Fortunately, this new legal guide gives employers all the information they need to know to hire ICs without risking an audit.

Table of Contents

Why You Need This Book
What Are Independent Contractors?	2	(1)
Why Hire Independent Contractors?	2	(1)
Who Decides Whether a Worker Is an Independent Contractor?	3	(1)
Questions to Answer Before Hiring Any Worker	3
Benefits and Risks of Hiring Independent Contractors
Benefits of Using Independent Contractors	2	(2)
Risks of Using Independent Contractors	4
The Common Law Test
The Need for a Legal Test to Determine Worker Status	2	(1)
The Right of Control Is Key	3	(1)
Factors for Measuring Control	4
Federal Taxes and the IRS Rules
Four Steps to Classification Under the IRS Rules	2	(1)
Step One: Check Statutory Independent Contractor Rules	3	(2)
Step Two: Analyze the Worker Under the Common Law Test	5	(13)
Step Three: Check Statutory Employee Rules	18	(4)
Step Four: Check the Safe Harbor Rules	22
IRS Audits
Why Audits Occur	2	(1)
Audit Basics	2	(4)
The Classification Settlement Program	6	(2)
IRS Assessments for Worker Misclassification	8	(3)
Penalties for Worker Misclassification	11	(2)
Interest Assessments	13	(1)
Criminal Sanctions	13	(1)
Retirement Plan Audits	13	(1)
Worker Lawsuits for Pensions and Other Benefits	14
State Payroll Taxes
State Unemployment Compensation	2	(1)
State UC Classification Tests	3	(9)
State Unemployment Tax Agencies	12	(4)
State Disability Insurance	16	(1)
State Income Taxes	16
Workers' Compensation
Basics of the Workers' Compensation System	2	(1)
Injured ICs' Rights to Sue You	3	(1)
The Need for Liability Insurance	3	(1)
Requiring ICs to Obtain Their Own Coverage	4	(1)
Providing Coverage for IC Employees	4	(1)
Determining Who Must Be Covered	5	(1)
Exclusions From Coverage	5	(3)
Classifying Workers for Workers' Compensation Purposes	8	(6)
Obtaining Coverage	14	(1)
State Workers' Compensation Offices	14
Hiring Household Workers and Family Members
Household Workers	2	(7)
Family Members As Workers	9
Labor and Anti-Discrimination Laws
Federal Wage and Hour Laws	2	(4)
Federal Labor Relations Laws	6	(1)
Anti-Discrimination Laws	6	(3)
Worker Safety Laws	9	(1)
Immigration Laws	9	(1)
Labor Departments	10
Intellectual Property Ownership
What Is Intellectual Property?	2	(1)
Laws Protecting Intellectual Property	2	(1)
Copyright Ownership	3	(4)
Trade Secret and Patent Ownership	7
Planning to Avoid Trouble
Hiring Incorporated Independent Contractors	2	(4)
Employee Leasing	6
Procedures for Hiring Independent Contractors
Before Hiring an IC	2	(3)
During the IC's Work Period	5	(1)
After the IC's Services End	6
Independent Contractor Agreements
Using Written Agreements	3	(1)
Drafting Agreements	4	(3)
Essential Provisions	7	(15)
Optional Provisions	22	(3)
Sample IC Agreement	25	(5)
Agreements for Specialized ICs	30
Help Beyond This Book
Finding and Using a Lawyer	2	(1)
Help From Other Experts	3	(1)
Doing Your Own Legal Research	4
A1 Appendix 1: How to Use the CD-ROM
A. Installing the Form Files Onto Your Computer	2	(1)
B. Using the Word Processing Files to Create Documents	3	(2)
C. Using the IRS Files	5	(2)
D. Files Provided on the Forms CD-ROM	7
A2 Appendix 2: Contractor's Screening Documents
Independent Contractor Questionnaire
Documentation Checklist
A3 Appendix 3: Sample Agreements
Introduction to Sample Agreements
Independent Contractor Agreement
Independent Contractor Agreement for Household Workers
Independent Contractor Agreement for Direct Sellers
Independent Contractor Agreement for Real Estate Salespeople
Independent Contractor Agreement for Consultants
Independent Contractor Agreement for Work Made for Hire
A4 Appendix 4: Blank IRS Forms
Form 843 Claim for Refund and Request for Abatement
Form 8809 Request for Extension of Time To File Information Returns
Form SS--4 Application for Employer Identification Number
Form SS--8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
Form W--9 Request for Taxpayer Identification Number and Certification
Index