Do you know the difference between an employee and an independent contractor? Josephine Vidal of Granite Payroll Associates spoke on that subject recently at the Greater Boston Business Network meeting. Employers love to hire independent contractors as the savings from payroll taxes, company benefits and insurance make it a very attractive situation for them. However, it’s not always easy to tell if you’re an employee or an independent contractor. Josephine provided us with some guidelines to help determine the status of a new hire.

Employees – generally work for one employer, work hours set by the employer, work at the employer’s place of business, receive company benefits, work under the control and direction of the employer, complete tasks as set by the employer, receive special training from the employer in order to do a better job and several other criteria.

Independent Contractors – tend to provide services to more than one company, set their own hours, work from their home or office, work relatively independently, decide how they are going to complete the task, have acquired their own specialized skills and education and again several more criteria to bolster their case as an independent contractor.

So, if you work from home, for one employer, set your own hours and complete the task as prescribed by the employer – what are you?  It’s not so easy to tell.  But, be warned that if you deem that person to be an independent contractor and the IRS decide otherwise you may be looking at some “penalties” in the form of payroll taxes, increased costs for workers compensation insurance, and other costs associated with hiring an employee.

About Granite Payroll Associates

Located at 176 Granite Street, Quincy, just outside of Quincy Center. Granite Payroll has been in business since 2004. A full service payroll firm servicing over 400 small to medium size businesses on the South Shore of Boston. Granite Payroll offers online, employee self service, time clocks, email, fax or phone to its clients to submit their payrolls. Granite Payroll’s dedicated staff have over twenty years of payroll experience.