Many artists think that there is an extended gray area as to whether "help in the studio" (i.e. part-time worker) is an employee or a contractor. The I.R.S. does not see this as a gray area, but always as black and white, leaning toward employee. This trend continues even more so in California 2020. If there is any doubt whether an individual working for you is an employee or an outside contractor, the I.R.S. will say this person is an employee. I know I said this twice. It's really important.
The I.R.S. states "anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed."
In contrast, "an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the results".
Quoting from the book Hiring Your First Employee, "The I.R.S. prefers to have workers classified as employees because it believes that independent contractors are relatively unreliable when it comes to paying taxes. If you treat a worker as an independent contractor, and the I.R.S. classifies that person as an employee, you'll be liable for employment taxes for the worker, and may also be charged a penalty for your erroneous actions."
For more information, read the details below. If you aren't sure...buy the book or get it from your library. It may be a valuable lesson you can learn. My previous post was a book review of Hiring Your First Employee by Nolo Press.
Harriete Estel Berman
"Behavioral control" refers to facts that show whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done – as long as the employer has the right to direct and control the work.
The behavioral control factors fall into the following categories:
- Type of instructions given
- Degree of instruction
- Evaluation systems
An employee is generally subject to the business’s instructions about when, where, and how to work.
All of the following are examples of
Types of Instructions:
- How to do work.
- When and where to do the work.
- What tools or equipment to use.
- What workers to hire or to assist with the work.
- Where to purchase supplies and services.
- What work must be performed by a specified individual?
- What order or sequence to follow when performing the work.
Degree of Instruction
Degree of Instruction means that the more detailed the instructions, the more control the business exercises over the worker. More detailed instructions indicate that the worker is an employee. Less detailed instructions reflect less control, indicating that the worker is more likely an independent contractor.
Note: The amount of instruction needed varies among different jobs. Even if no instructions are given, sufficient behavioral control may exist if the employer has the right to control how the work results are achieved. A business may lack the knowledge to instruct some highly specialized professionals; in other cases, the task may require little or no instruction. The key consideration is whether the business has retained the right to control the details of a worker's performance or instead has given up that right.
If an evaluation system measures the details of how the work is performed, then these factors would point to an employee.
If the evaluation system measures just the end result, then this can point to either an independent contractor or an employee.
If the business provides the worker with training on how to do the job, this indicates that the business wants the job done in a particular way. This is strong evidence that the worker is an employee. Periodic or ongoing training about procedures and methods is even stronger evidence of an employer-employee relationship. However, independent contractors ordinarily use their own methods.
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This post was updated on January 13, 2022.