I have noticed a shift in the landscape of employment, or the lack thereof, since the recession hit our nation some years ago. As several of my friends and colleagues are just now returning to work, they are faced with a different type work relationship with the companies, firms and organizations they are accepting employment with. Specifically, the hiring process and work environments displayed through several recruitment efforts and job descriptions these days are swaying heavily towards that which is known as either a â€śTemporary to Permanent Employmentâ€ť and/or â€śIndependent Contractorâ€ť positions.
According the IRS, a general rule of being an Independent Contractor is â€śif the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.â€ť
Some examples of most Independent Contractors include, doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors.
According to the United States Small Business Administration, the characteristics of an Independent Contractor include: Operating under a business name, has his/her own employees, maintains a separate business checking account, advertises his/her business services, invoices for work completed, has more than one client, has own tools and sets hours and keeps business records. You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.
I had my first experience as an â€śIndependent Contractorâ€ť, based upon an Agreement I signed, while in Law School. I was interning for free at an entertainment based company and was quickly promoted to a full time marketing employee, or so I thought. After I accepted the position, I received several documents to execute where I had to acknowledge that I was an â€śIndependent Contractorâ€ť. I was responsible for paying my own taxes (personal and self-employment) and agreed in writing that no employer-employee relationship existed. I instantly thought this was some major bulls*&^, because I was still responsible for being at the office at a certain time and my duties were dictated by my supervisor on how and where they would be completed. I quickly learned, after much probing, that ALL of my fellow colleagues were in fact deemed Independent Contractors as well. However, the majority of them did not fully understand what this meant. Several of them thought the fact that no taxes were withheld from their checks meant they did not have to pay taxes.