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Is Your "Independent Contractor"
Really an "Employee?"


Many times, as agents, we are told that our insured doesn’t have any employees; “I only hire independent contractors”.  Whether or not they have an employer/employee relationship or have hired an independent contractor, it is not up to the agent to make that determination. 

The IRS has come down hard on these employers, and to make sure you don’t get caught, there are a series of questions the IRS has come up with that you can answer.  These questions are only a guide.  If you answer “yes” to any of the questions, there is possibly and probably an employer/employee relationship. It is always best to get an attorney’s opinion first, but this should help.


  1. Do you provide the worker with instructions as to when, where and how work is performed?

  2. Did you train the worker in order to have the job performed correctly?

  3. Are the worker’s services a vital part of your company’s operations?

  4. Is the person prevented from delegating work to others?

  5. Is the worker prohibited from hiring, supervising, and paying assistants?

  6. Does the worker perform services for you on a regular and continuous basis?

  7. Do you set the hours of services for the worker?

  8. Does the person work full time for your company?

  9. Does the worker perform duties on your company’s premises?

  10. Do you control the order and sequence of the work performed?

  11. Do you require workers to submit oral or written reports?

  12. Do you pay for the worker’s business and travel expenses?

  13. Do you pay the worker by the hour, week, or month?

  14. Do you furnish tools or equipment for the worker?

  15. Does the worker lack a “significant investment” in tools, equipment, and facilities?

  16. Is the worker insulated for suffering a loss as a result of the activities performed for your company? 

  17. Does the worker perform services solely for your firm?

  18. Does the worker not make services available to the general public?

  19. Do you have the right to discharge the worker at will?

  20. Can the worker end the relationship without incurring any liability?


Remember, a yes answer to any of the questions may mean you have an employee, not an independent contractor.


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