Employee vs. Independent Contractor: Factor 5 - Integral Nature of Worker
The fifth factor considered by the IRS in determining whether a worker qualifies as an employee or an independent contractor is the integral nature of the worker to the work being performed. The main question being asked by the IRS in this instance is whether the tasks being performed by the worker are an essential part of the service recipient’s regular business. The "service recipient" is the employer of the worker.
While this factor is a little more abstract than the previous factors, an example may help illustrate the factor. If the service recipient or employer’s normal business involves trucking and uses its own trucks, trailers and drivers. If the employer uses drivers that provide their own trucks, those drivers may be considered employees by the IRS rather than independent contractors because they are performing substantially the same job as those using the employer’s trucks.
Next time, we will discuss the sixth factor, permanence.
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I am not sure if this post is appropriate, but here goes:
I have taken 2 part time jobs as an “independent contractor”
The first is as a courier for a company that has a contract with banks for bulk intercompany mail delivery. I report to a dispatch area to check for any mail that needs to be dropped off to the branches on my assigned delivery route. I then proceed to pick-up and drop off mail at assigned branches and return to dispatch for drop off.
FACTS:
1) signed contract as “independent contractor”
NO milage or other expenses paid by company except for the mentioned gas allowance
2) Will recieve 1099; no taxes withheld
3) Use own Vehicle, no logos on it. But,required to wear company shirt
4) Pay Flat-Rate per day based on route-Agreed upon in contract
5) Pay deduction for Corporate Insurance Policy- I assume Liability Poilicy;This was not negociable
6) Pay period also includes a minimal gas allowance credit
7) Pay was deducted for Company shits and for padlock and chain.
9) Recieved 1 day unpaid training on route; minimal supervision except for checking for wearing Corporate shirt; manager occasionally calls my cell phone, but never leaves voicemail.
10) There are no performance bonuses, but the route can be completed before the required time using shorcuts and bypassing heavy traffic areas
I belive that I have a case for misclassification. The bottom line is that I am paid less than the IRS allows for standard mileage deduction. I am paying this company for the privelage to work! Do I have justification to take action with this company? Any thoughts?
The second job is delivering newspapers. The PA Courts seemed to side with the newspaper companies in regards to Unemployment Compensation disputes. I am not sure why? This company Contracts with a number of Newspapers to deliver papers to thier subscribers. It has Employee managers that train the contractors, so I am basically doing the main job that the Newspapers contracted this company to do.
Any thoughts or comments?
Comment by Mitchell Demchak — October 3, 2007 @ 9:54 pm