Q. If hiring an employee as an Independent Contractor, how long can you employ them (full time) without it becoming an "avoiding having an employee/benefits issue"?
A. Great question - Determining whether or not an Independent Contractor (IC) is really an employee can be one of the hardest determinations that a manager can make. Here are some guidelines that must be met in order for an IC to not be considered an employee:
1. An IC has total control over how the work gets done. They do not need to adhere to a certain work schedule, and they make determinations about the tools and training required to complete the work.
2. An IC has the opportunity to realize a profit or incur a loss. Normally, the IC peforms similar functions for other companies as well (or has the ability to do so.)
3. Both the IC and the employer view their relationship as independent of one another. For example, in most IC/employer relationships, there is a contract with expressed statements regarding the independence of the contractor.
There is no "magical" length of time at which point an IC becomes an employee, but generally, if the work is temporary then the employer is fine to keep them at an IC status. Once the work becomes permanent, a good practice is to transition them from IC to employee status.
Thanks for your question!!
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