Verified Document

Human Resource Management: Employees Vs. Independent Contractors Chapter

Employee vs. Independent Contractor Employees vs. Independent Contractors

John, who owns his own consulting firm, is picked to work for Make-a-Bed, a furniture manufacturer and distributor, and since he is not readily available as a full time employee, it is agreed that he should work as independent contractor. He is expected to study the business and make recommendations accordingly, to arrange for his own travel and meetings, dedicate about 20 hours each week to the project, and is to be paid on an hourly basis after presenting an invoice. However, the other businesses John deals in become a cropper come and he ends up dedicating more of his time to Make-a-Bed. After one year has passed and he has not made recommendations, John is replaced with another consulting agency and he attempts to claim unemployment benefits with Make-a-Bed as the last employer.

In court, John refutes any claims that he agreed to work as an independent contractor. He testifies that he notified the Human Resource Department (HRD) any time he would arrive early or late, he worked for normal business hours, and even had an office assigned to him by the company. His checks were also issued from the business payroll account. On the other hand, the company claims that John worked for extra hours for security reasons, he had an office due to access to the business computer system, and that he was not required to give any notifications to HR. Furthermore, he does not receive any employment benefits.

The IRS claims that individuals can either be employees or independent contractors. In the case of employees, the employer must withhold or pay federal income, Medicare and social security taxes, and also pay unemployment tax on their wages. For independent contractors, employers do not have to pay federal taxes on payments. To determine whether an individual should be treated as an employee or an independent contractor, all the information that shows evidence of the degree of independence and control should be put into consideration. The IRS (2015) states that the facts that show this evidence are classified into financial control, behavioral control, and the relationship that exists between the parties
Behavioral control presents facts that show exactly who has control over the business, the individual or the employee. For the employees, the employer gives specific details of how work should be carried out while for independent contractors, instructions on how the work should be carried out are not give (IRS, 2015). Employees are also trained while independent contractors are left to rely on their own expertise. Financial control entails the payments that exist between the employer and the individual. They include (IRS, 2015):

The unreimbursed expenses the worker has: Independent…

Sources used in this document:
References

Fishman, S. (2014). Consultant & Independent Contractor Agreements. Berkeley, CA: NOLO

The Internal Revenue Service (2015). Employer's Supplemental Tax Guide. Publication 15-A. Retrieved 22 March 2015 from http://www.irs.gov/pub/irs-pdf/p15a.pdf
Cite this Document:
Copy Bibliography Citation

Related Documents

Human Resource Management: HRM Human Resource Management
Words: 926 Length: 3 Document Type: Essay

Human Resource Management: HRM (Human Resource Management) is the process that involves planning, executing, recruitment and management of the development measures within an organization. These development initiatives within an organization also entail selection, training and profession. The primary aim of human resource management is to exploit an organization's productivity by optimizing the efficiency of the employees. The exploitation of the organization's productivity takes place while improving employees work life and treating

Human Resource Management the Importance of Staff
Words: 2180 Length: 7 Document Type: Essay

Human Resource Management The Importance of Staff The paper will critically examine the statement: "Staff are the most important resource in any organization and its cost should be regarded as an investment rather than an expensive item of expenditure"(Torkildsen, G. 1992). The paper will deal with the relevant information regarding the statement and its discussion. The entire paper will be based on critical examination of the assertion with specific reference to literature

Human Resources - Critically Appraise the Historical
Words: 5631 Length: 15 Document Type: Term Paper

Human Resources - Critically appraise the historical development and future direction of Human Resource Management in the Hospitality Industry Personnel Management & Human Resource Management Links of Corporate Strategy and Human Resource Management -- An Analysis Image-Hospitality Industry Organizational Behavior Trends in Hospitality Management Human Resourcing strategies in Hospitality Industry Personnel Management & Human Resource Management The practices of people management have received additional importance due to the present emphasis on the renewed interest in human resources. Traditionally,

Human Resources in Today's Business
Words: 1551 Length: 5 Document Type: Thesis

This type of planning can help manage companies' assets and keep it in line, providing more robust information for future planning on an executive or managerial level. Regardless of the type of business or company, a robust Human Resources department is an absolute necessity. Such departments provide support, increased productivity, and future growth for any organization. Even in these tough times, the Human Resources departments of the United States are

Human Resource Planning Is Focused on Moving
Words: 784 Length: 2 Document Type: Research Paper

Human resource planning is focused on moving the workers and the company forward. It looks to the future, not just to what is happening right now. It relates to other human resource management activities through its need for a clear understanding of the current situation so that future predictions and decisions can be made. In other words, it is not possible to effectively plan for human resource needs in the

Human Resources Outsourcing in the
Words: 4211 Length: 15 Document Type: Term Paper

There is a profound and emotional stigma linked with outsourcing. For firms it gives hope and assurance for survival but for those relocated the topic is met with strong anger. Throughout the years of prosperity outsourcing was used to increase operating return-on-investment (ROI) and fill supply gaps that could not be provided domestically. Now that circumstances are different outsourcing is looked at as a means for continued existence. However outsourcing

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now