There Were Many Discussions This Year About Someone Working As An Employee Or An Independent Contractor
Under the new Tax Law, there can be a 20% pass through on income for different types. Some people will consider their business formation: Sole Proprietor, C or S Corporation, General Partnership. Will be an interesting year.
For Years, State And Federal Government Regulators Have Believed That Many Employers Improperly Classify Employees As Independent Contractors So That They Do Not Have To Pay:
- Payroll Taxes
- Minimum Wages
- Business Expenses of Employees
- Workers Compensation Insurance
- Unemployment Insurance
- Disability Insurance
- Last, but by far not least, Social Security
In my opinion, many workers want to be Independent Contractors, so that they can more easily deduct their business expenses. My opinion is that Regulators want everyone to be employees. There is an economic realities test used to determine where a worker fits. This comes from a California Supreme Court Case, S. G. Borello & Sons, Inc. against the Department of Industrial Relations (1989).
Not an easy question to be resolved. Let me alert you. Classifications can be questioned by Insurance Carriers, Tax Franchise Board, Internal Revenue Service, and others. Yes, I have been there.
Any comments, Real Estate Licenses?