Working with independent contractors

Hire independent contractors without running into trouble

Independent contractors (ICs) do every conceivable type of work--from accounting to web development, and "gig economy" websites make it easy to find and hire qualified ICs. Working with independent contractors saves your business money and gives you flexibility in hiring. But there are risks in trying to establish IC relationships. Simply calling a worker an independent contractor doesn't make them so. This book shows you how to avoid mistakes that can lead to lawsuits or costly fines from the IRS and state agencies.

Learn how to:
determine (and document) who qualifies as an IC assess the risks of hiring freelancers and gig workers safeguard your company's intellectual property protect yourself if there's a legal dispute, and handle--and settle--an IRS audit.
The 9th edition--completely revised to reflect the latest changes in the law--includes detailed examples of how a business should hire independent contractors.

• Your Legal and Tax Guide to Hiring and Working with Independent Contractors p. 1
• 1 Benefits and Risks of Working With Independent Contractors p. 5
• Benefits of Using Independent Contractors p. 6
• Risks of Using Independent Contractors p. 10
• 2 The Common Law (Right to Control) Test p. 17
• When a Legal Test Is Necessary to Determine a Worker's Status p. 19
• The Right of Control Is Key p. 21
• Factors for Measuring Control of Your Workers p. 22
• Evaluating a Worker's Status p. 35
• 3 How the IRS Classifies Workers p. 41
• Four Steps to Classification Under the IRS Rules p. 42
• Step 1 Check Statutory Independent Contractor Rules p. 48
• Step 2 Analyze the Worker Under the Common Law Test p. 51
• Step 3 Check Statutory Employee Rules p. 73
• Step 4 Check the Safe Harbor Rules p. 81
• 4 IRS Audits p. 99
• Why Audits Occur p. 101
• Audit Basics p. 102
• The Classification Settlement Program (CSP) p. 109
• Voluntary Classification Settlement Program (VCSP) p. 113
• IRS Assessments for Worker Misclassification p. 116
• Penalties for Worker Misclassification p. 123
• Interest Assessments p. 125
• Criminal Sanctions p. 126
• Obamacare Penalties p. 126
• Retirement Plan Audits p. 126
• Worker Lawsuits for Pensions and Other Benefits p. 128
• 5 State Payroll Taxes p. 131
• State Unemployment Compensation p. 132
• State UC Classification Tests p. 137
• State Disability Insurance p. 154
• State Income Taxes p. 157
• 6 Workers' Compensation p. 159
• Basics of the Workers' Compensation System p. 160
• Who Must Be Covered p. 164
• Exclusions From Coverage p. 164
• Classifying Workers for Workers' Compensation Purposes p. 170
• If Your Workers Are ICs p. 182
• Obtaining Coverage p. 186
• 7 Health, Safety, Labor, and Antidiscrimination Laws p. 187
• Obamacare (Affordable Care Act) p. 189
• Federal Wage and Hour Laws p. 192
• Federal Labor Relations Laws p. 199
• Family and Medical Leave Act p. 200
• Fair Credit Reporting Act p. 200
• Antidiscrimination Laws p. 202
• Worker Safety Laws p. 205
• Immigration Laws p. 206
• 8 Intellectual Property Ownership p. 209
• What Is Intellectual Property? p. 210
• Laws Protecting Intellectual Property p. 210
• Copyright Ownership p. 212
• Trade Secret and Patent Ownership p. 219
• 9 Strategies for Avoiding Trouble When Hiring ICs p. 221
• Hiring incorporated Independent Contractors p. 222
• Employee Leasing p. 230
• 10 Procedures for Working With independent Contractors p. 239
• Before Hiring an IC p. 241
• While the IC Works for You p. 247
• After the IC's Services End p. 251
• 11 Independent Contractor Agreements p. 263
• Using Written Agreements p. 265
• Drafting Agreements p. 269
• Essential Provisions p. 276
• Optional Provisions p. 302
• Sample IC Agreement p. 310
• 12 Finding Legal, Financial, and Other Help Beyond This Book p. 317
• Finding and Using a Lawyer p. 318
• Help From Other Experts p. 320
• Doing Your Own Legal Research p. 321
• Appendixes
• A How to Use the Downloadable Forms on the Nolo Website p. 329
• Editing RTFs p. 330
• List of Forms Available on the Nolo Website p. 331
• B Contractor Screening Documents p. 333
• Independent Contractor Questionnaire p. 335
• Worker Classification Checklist p. 339
• Index p. 343