Employee Or Independent Contractor: Classifying Correctly As a business owner, you have the obligation to correctly classify the people that work for you. In many cases, it is extremely easy to determine who is an employee and who is an independent contractor. You wouldn't dream of calling the kid who mows your lawn every Saturday an employee of yours. But often times, the line can be blurred. This is only compounded by the fact that there are plenty of prominent examples of companies who seem to be taking every advantage under the law to avoid calling their employees what they obviously are. Misclassification, however, can be dangerous to your business. A lawsuit could sink you. Here are some ways to help ensure that you classify correctly.PrinciplesBoth the federal government and many states have come up with various laws and principles to help companies determine whether they should classify a worker as an employee or an independent contractor. These rules vary from place to place, but they generally focus on how much control a worker has over their circumstances. Is it the worker who largely determines the work they are doing, or is it the employee? Compensation can come into play as well. If there is a regular Friday paycheck,Ralph Lauren Outlet Online, wouldn't that worker be classified as an employee? ChecklistSome of the concepts that can help an employer determine whether they are dealing with an employee or an independent contractor are as follows. Are they supplying their own equipment or are you providing it to them. This line can be blurred in an era of telecommuting and so forth, but generally speaking, a company is going to provide an employee with the tools they need to do the job. Does the worker have the choice of whether or not to come into work on any given day without the fear of losing the job? This is rarely the case for an employee. The nature of the work, i.e., whether it is permanent or temporary,Polo Outlet Online, may also play a role in making the determination.Economic RealityA new concept has begun to spring up in several courts around the country in an attempt to further define employee status and how it differs from that of an independent contractor. This concept is known as an economic reality test, and it involves looking at how dependent a worker is on a specific company when it comes to their overall income. If a worker derives most of their income from one company,http://ralphlaurensell.moonfruit.com/, the courts have said that it may be taken as a sign that they should be classified as an employee.