Should You Be Filed As A Subcontractor Or Employee?

Many people in Hyannis and the surrounding area work as independent contractors, or sub-contract. It is common for many in the construction field, or home improvement business to be classified as such, but many different fields can have independent employee-or-contractor1contractors. If you are currently filed as a subcontractor, it is important that the work that you do is actually as an independent contractor.

Many business owners may file their employees as ‘independent contractors’, which means that they are not obligated to pay their employees overtime, have workers compensation policies in place, and they do not withhold taxes on behalf of the employee. If a small business owner is wrongfully classifying an individual as an independent contractor when in actuality they are an employee, it could have serious civil and criminal consequences for the business owner or the persons responsible.

When is someone Legally an Independent Contractor?

According to the law, if someone is to legally be considered an independent contractor or subcontractor they must meet three criteria. 1.)They must have minimum supervision and instruction and dictate their own hours. 2.) The individual’s work must be part of a separate and distinct business– not something that is in the “usual course of business” of the employer. And 3.) The individual cannot be dependent on one employer for the continuation of services.

If any of these criteria are not met, then the individual is by law, an employee. If you are a small business owner on the Cape and have employees that you have classified as subcontractors, or employees that you think could be classified as such, it is important
speak with a qualified business lawyer
to ensure that you are operating lawfully.

At Wynn and Wynn, we have the industry knowledge you need to assist you in the operation of your business. If you have any questions, call us at 1-800-852-5211 or click here to schedule your free consultation.