This is the sixth post in the Independent Contractor/Employee series. This series is dedicated to presenting individuals, sole proprietorships, and small to large businesses with a basic understanding of independent contractor issues.
Revenue Ruling 87-41 states the factors the IRS considers when whether a worker is an independent contractor or employee. These factors are divided into three groups: behavioral control, financial control, and relationship of the parties. This article focuses on other relevant factors the IRS considers when reviewing a workers’ status.
1. Part-time or full-time. A worker may perform services for a particular business on a part-time basis and may work for more than one person or business. These workers may be either employees or independent contractors. Similarly, devoting full-time to work for one business is also consistent with either employee or independent contractor status. Providing services for more than one business can be consistent with either employee or independent contractor status.
2. Temporary employment. A worker who performs services for a business on a temporary or short-term basis could be an employee. Whether a temporary or short-term worker is an employee or an independent contractor is, again, dependent upon other factors.
3. Place of work. Whether work is performed on the business’ premises, or at a location selected by the business, often has no bearing on worker status. When it is relevant evidence, it will be relevant because it illustrates the business’ right to direct and control how the work is performed. Requirements inherent in the result to be achieved are not evidence of the right to direct and control how the work is performed. For example, a camera operator must shoot a commercial at the same location as the director and actors.
4. Hours of work. Some work must by its nature be performed at a specific time. For example, the camera operator must be ready to provide photography services when the actors and director are on hand. This relates to the result to be achieved, not how the work is performed. In today’s work, flexible hours are consistent with either independent contractor or employee status.