COVID-19 Alert   We have changed our procedures for COVID-19.   Learn More
What to consider when laying off employees due to COVID-19. Learn More

IRS Pushes Independent Contractor/Employee Issue

The IRS appears to be taking stronger steps toward ensuring employees are not misclassified as independent contractors. The IRS “considers this a major issue of non-compliance.” The IRS encourages workers that believe they have been misclassified to file a Form SS-8 with the IRS to challenge the determination and to get the IRS to reclassify the worker.

The IRS also allows workers to file a Form 8919 while the reclassification is being reviewed. The form allows workers to pay only the portion of the FICA and Medicare that are attributable to employee, instead of the entire FICA and Medicare tax applicable to true independent contractors.

The IRS looks at three areas to determine a workers’ status:

  • Behavioral control (whether the business has a right to direct and control how the worker performs the task for which they are hired)
  • Financial control (whether a worker has the ability to affect financial decisions)
  • Type of relationship (what does the contract between the worker and the business say; does the worker get benefits; permanency of the relationship)

The IRS correctly directs employers and employees with questions regarding appropriate classification to seek advice from a knowledgeable professional.

The Law Office of Phillip J. Griego
95 South Market Street, Suite 520
San Jose, CA 95113
Tel. 408-293-6341
Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.