I often hear people in the wedding industry say:

“Well, I’ve decided to classify my associate as an independent contractor because it’s just easier for all of us.”

Here is the thing tho… we don’t really get to decide. This is NOT like the option of whether we color our hair blonde or red. The IRS decides contractor/employee status for us. And, if your contractor looks and smells like an employee, you could get dinged on having to pay employment back taxes AND penalties. Who wants that? {not me}

The IRS Independent Contractor Definition

The IRS wants to make sure that the contractor has complete control over his or her work.  “Control” is the determinant in whether you have an employee or a contractor.  Here are the rules from the IRS:

“In determining whether the person providing service is an employee or an independent contractor, all information that provides evidence of the degree of control and independence must be considered.  Facts that provide evidence of the degree of control and independence fall into three categories:

  1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?”

Not so black-n-white, huh? There is no long checklist that they provide as to what a contractor should have in place OR what an employee should have in place.

I have an independent contractor. NOW WHAT?

You can cover your butt. Create as MUCH distance in that relationship as you can. (Here’s 3 things you should stop doing.)

These are a few things that you can do to help create distance.

  1. Have a contract in place. (You can find one here.)
  2. Ensure that your contractor is sending you invoices. (They shouldn’t be filling out your timesheet.)
  3. Ensure that their job is very specific. A contractor is hired as an expert in a certain field. Make sure their work is focused.

Create a trail of independence between your contractor and your business. (They should have the same relationship to your business as your website designer does.) The more independence, the better!

Need more help knowing what to do? Check out: