The rules regarding who is an employee and who is an independent contractor vary by state and can be surprisingly strict. If the State determines at any point during or after employment that a subcontractor was really an employee there may be substantial taxes, interest and penalties due to both the IRS and the DOL.
Below find an easy to understand check list by the Washington State Department of Labor & Industries:
The Small Business Administration also produces a list of questions that help determine who may or may not be an employee. Here is a link to their checklist:
This is a link to the Oregon Statutes:
And if you’d like to read some recent court findings regarding this topic, click on these links:
If you have questions, call us – we can help!