So, sharing economy or not, how does one go about analyzing the status of a worker or group of workers? Who does it, and what are the standards?
California rules:
· Whether the one performing services is engaged in a distinct occupation or business;
· The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
· The skill required in the particular occupation;
· Whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
· The length of time for which the services are to be performed;
· The method of payment, whether by the time or by the job;
· whether or not the work is a part of the regular business of the principal; and
· Whether or not the parties believe they are creating the relationship of employer-employee.
IRS standard:
1. Instructions. The more instructions that are given, the more likely is employee status.
2. Training. The more training, the more likely is employee status.
3. Integration. The more closely integrated the work is with the employer’s business, the more likely is employee status.
4. Services rendered personally. If the worker must personally do the work, employee status is likely.
5. Hiring, supervising, and paying assistants. A person who does these things will often be an independent contractor.
6. Continuing relationship. The longer the arrangement’s term, the more likely is employment status.
7. Set hours of work. Set hours indicate employment status.
8. Full-time required. Working full-time indicates employment status.
9. Doing work on employer’s premises. Working on the employer’s premise may suggest employment status.
10. Order or sequence set. Performing services in a particular order or sequence set suggests employment status.
11. Oral or written reports. Reports to an employer tend to suggest employment status.
12. Payment by hour, week, or month. Payment by the hour, week, or month suggests employment status.
13. Payment of business and traveling expenses. Payment of business and traveling expenses suggests employment status.
14. Furnishing of tools and materials. Furnishing significant tools, materials, and other equipment suggests employment status.
15. Significant investment. A worker’s significant investment tends to indicate independent contractor status.
16. Realization of profit or loss. A worker’s potential to realize a profit or suffer a loss suggests independent contractor status.
17. Working for more than one firm at a time. Working for more than one firm at the same time suggests independent contractor status.
18. Making service available to the general public. Making services available to the general public on a regular and consistent basis suggests independent contractor status.
19. Right to discharge. The right to discharge a worker suggests employment status.
20. Right to terminate. A worker’s right to terminate the relationship without incurring a liability suggests employment status.