paying mileage to independent contractors

Here are some examples of employees and independent contractors. The actual relationship between the parties must be examined. Written contracts are considered when determining worker classifications, but they do not make a worker an employee or an independent contractor.

Services performed by the worker are a key aspect of the regular business activities.

There is a continuing relationship between you and the worker.

The worker has the right to receive employee benefits.

The worker has the right to quit without incurring liability.

These factors illustrate how you and your worker perceive your relationship and indicate your worker is an employee:

The services provided are not an integral part of the business (for example, a bank hiring a plumber).

The worker offers services to the general public.

The worker has a significant investment in the work.

The worker has an opportunity for profit or risk of loss.

These financial aspects indicate the worker is an independent contractor:

You provide tools, materials, and other equipment.

You pay at regular intervals (hourly, weekly, etc.).

You reimburse or pay travel and business expenses.

These financial aspects indicate the worker is an employee: If you have the right to direct or control the administrative aspects of the work, you have financial control over the worker.

You provide training regarding procedures and methods.

You decide where supplies and services will be purchased.

You determine who will be hired to assist with the work.

You specify the sequence in which services will be performed.

You specify which tools or equipment will be used.You direct how, when, or where the work will be done.

These behavioral control factors indicate the worker is an employee:

You do not have to actually direct or control the way work is done, so long as you have the right to do so. If you have the right to direct or control the manner and means in which services are performed, you have behavioral control over the worker. Nonetheless, all factors must be considered. Not all of these factors need to be present to determine worker status. If you are generally in control of (or have the right to control) these factors, the worker is most likely your employee. These factors fall into three main categories: Many factors are considered when deciding if a worker is an employee or an independent contractor. All evidence of control and independence must be considered. To determine if an individual is an employee or an independent contractor, the business relationship between you and the individual performing the services must be examined.

Paying mileage to independent contractors