5 Reasons Your Independent Contractors Are Probably Employees
For a growing Pet Sitting or Dog Walking business — the decision to use Independent Contractors vs. Employees is one of the earliest, hardest and most important decisions you make. On the surface — using ICs makes a lot of sense. You don’t need to classify them as employees which means you don’t need to pay all the employment taxes. However, classifying your staff as ICs doesn’t necessarily make them ICs in the eyes of the IRS. You need to treat them as ICs by following the guidelines the IRS has created. So what are the guidelines? While they can be difficult to understand — the IRS has created a 20 Factor Test to help you understand if your staff members are employees or ICs. We’ve spent significant time researching this (check out our blog on The Great Independent Contractor vs. Employee Debate) and have come to the conclusion that for most Pet Sitting or Dog Walking companies — their staff members are employees. Here are the top 5 reasons we believe that:
- If your staff members are receiving instructions from you about when, where and how they are to provide pet sitting or dog walking services — they tend to be employees. This means that a representative of your business is informing a staff member to “please walk John Doe’s dogs on Wednesday at his house between 1–2pm”. While this isn’t always the case — it is a strong indicator to the IRS that your staff members are employees.
- If the success or continuation of your business is dependent on your staff members — that indicates an employer/employee relationship. Would your business remain successful if your ICs no longer provided services? Would your business be able to continue if they no longer provided services? If not — the IRS may consider them employees instead of ICs.
- Providing training to staff members is another strong indicator that they may be an employee. If you require a new staff members to conduct visits with or shadow an experienced staff member — the relationship is more than likely that of an employer/employee. This can also include training materials you give to new staff, training seminars or other instances where you train workers on how you expect them to provide services.
- A continued relationship between your business and the staff member is another indicator. This does not necessarily mean that your staff member needs to work each and every week. The IRS states that a continuing relationship could exist at frequently recurring although irregular instances. If you continue to use the same IC regularly — they may be considered an employee.
- If an IC only provides services for your business — that is one more indicator that they may be an employee. If the IC performs services for multiple pet care companies — that is an indicator that they are an Independent Contractor. However — a staff member that works for several companies may also be considered an employee of each dependent on other factors.
Classifying staff members as Independent Contractors or Employees is one of the hardest (but most important) decisions a Pet Sitting or Dog Walking company makes. Be sure to check out our blog on The Great Independent Contractor vs. Employee Debate for lots of information and resources on making the right choice for your business!
Time To Pet is not a law firm and does not provide legal advice. It is best to consult with a lawyer regarding specific questions relating to worker classification. Worker classification can vary by government agency and from state to state.
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