Problem 1: Employee or Independent Contractor? When the IRS determines if an individual is an employee or a contractor, the IRS considers the level of control an employer has over the work of the person. Three major areas are reviewed: (1) behavioral control, (2) financial control, and (3) the person-employer relationship.
Problem 2: Explain each of the three IRS areas of control used to determine if an individual is an employee or contractor.
Problem 3: Identify other types of tests or guidelines that are available to help HR to determine whether an individual is to be classified as an employee or an independent contractor.
Problem 4: Pros and Cons to Hiring. Describe in detail two pros and two cons for hiring an independent contractor. Include actual workplace examples, if available.
Problem 5: Legal Implications. Identify the specific legal implications for the misclassification of an employee as an independent contractor. Share a real-life story if you are aware of an actual workplace situation.