From the course: Hiring Contract Employees
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Legal definitions
Max is the operations manager at a growing online business in Los Angeles. Trying to keep his head count low, he considers hiring Inga as an independent contractor to create some software applications for the company. Inga tells Max she's done similar programming gigs in the past. Inga is contracted to work a full-time schedule at the company for the next six months under Max's supervision. Max likes the idea of Inga being independent and the fact that he would not have to pay for a bunch of income and employment taxes, health insurance, and workers' comp too. It seems like everything a manager could ask for. But not so fast. Max is about to not only make a big business decision, but a legal one as well. You see, if he misclassifies Inga as an independent contractor, he could face significant fines and penalties and exposures he hadn't even considered. So, how will Max know if Inga is really an independent contractor? We begin our discussion by looking at how the IRS defines…
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