independent contractor


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independent contractor

One who is hired to reach a certain goal or perform a certain task,but who has the ability and the right to determine the methods and times for reaching that goal or task,so long as it is not illegal and is within the limits of the contract.This is an important concept because

1. Employers must take withholding taxes and pay matching taxes for employees but not independent contractors. The IRS has significantly tightened the definition of indepen- dent contractor so that most work relationships do not qualify. Under certain circum- stances, real estate agents have been held to be employees for tax purposes.

2. If an independent contractor is negligent or commits an intentional tort, then the person who hired the contractor is not generally liable for the resulting damage. If an employee did the same thing, the employer would be liable so long as the employee was acting within the line and scope of his or her employment, which is usually a fairly easy hurdle for plaintiffs' lawyers to overcome.

3. An exception exists for the general rule of nonliability for the actions of an independent contractor, and that is in the area of real estate brokerage. Most real estate agents are independent contractors working for the broker. Real estate licensing laws, however, usu- ally hold the broker responsible for the actions of agents.

Independent Contractor

A taxpayer who contracts to do work according to his own methods and who is not subject to control except as to the results of such work. An employee, by contrast, is subject to the control of the employer as to the methods to be used to obtain the desired results.
References in periodicals archive ?
Independent contractors, on the other hand, must submit their own federal, state, and local income tax payments including self-employment taxes (Social Security and Medicare/Medicaid) directly to the tax authorities.
The interpretation discusses the multifactored "economic realities" analysis applied by the courts in differentiating employees from independent contractors under the FLSA.
In the past decade or so, several state and federal agencies--including the IRS--and have been cracking down on companies claiming to use independent contractors who in reality perform like employees of the company.
There is some risk in engaging the services of any independent contractor, other than those of a small business, on an occasional basis, that are not significantly related to the core business.
A: Unless the nature of the relationship changes to meet the requirements of independent contractor status, reinstating laid off employees and simply calling them independent contractors does not change their status.
2d at 1120, which applied an abuse of discretion test to MSHA's decision to issue an imminent danger order to a production operator for violations committed by its independent contractor.
Require the independent contractor to create and maintain all required reports and documentation showing compliance with Part 50 reporting and recordkeeping requirements, and require it to provide documentation to the mine operator that such records are being created and maintained.
Determine whether the independent contractor is in an independent business offering similar services to others.
Many of you are or will be hiring independent contractors to help complete the projects.
Mary is deemed to be an employee and Helen is deemed to be an independent contractor.
In reality, just knowing the difference between an independent contractor and an employee can be difficult.

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