Are you an employee or independent contractor?

Seems some companies may be taking advantage of the classification "contractor" to avoid added cost of them being an "employee". When I was much younger I had a paper route with Tampa Tribune. Circulation department considered us all "independent contractors" although specific routes were assigned and even a company prepay system for customers was set up. Since I was "independent contractor" I worked to get my customers off the company prepay system which often was frustrating to keep the accounts straight with the company and instead had them pay me personally. I wasn't the only one. Result was the Tampa Tribune then went the other direction and required everyone with a route to become an "employee". Guess what? Seems some "employees" were less than other "employees" since the same perks the original "employees" received weren't available to us. Since it was a second job at the time, I eventually dumped it. Oh yeah, I was still "self employed" for tax purposes. Must have been a loophole then in early 70's.

LINK


U.S. Cracks Down on 'Contractors' as a Tax Dodge
by Steven Greenhouse
Thursday, February 18, 2010

provided by
The New York Times

Federal and state officials, many facing record budget deficits, are starting to aggressively pursue companies that try to pass off regular employees as independent contractors.

Many workplace experts say a growing number of companies have maneuvered to cut costs by wrongly classifying regular employees as independent contractors, though they often are given desks, phone lines and assignments just like regular employees.

Companies that pass off employees as independent contractors avoid paying Social Security, Medicare and unemployment insurance taxes for those workers. Companies do not withhold income taxes from contractors' paychecks, and several studies have indicated that, on average, misclassified independent workers do not report 30 percent of their income. (more in article)