To determine whether an individual is an employee or independent contractor under the common law, the relationship of the worker and the business must be examined. All evidence of control and independence must be considered. In an employee-independent contractor determination, all information that provides evidence of the degree of control and degree of independence must be considered.
Independent Contractor or EmployeeUnder federal and state laws, an independent contractor must be just that, independent. He or she must provide a product or service without punching a time clock or being told how to do the job. Independent contractors are described as persons engaged in occupations who contract to perform work according to their own methods, without being subject to control of the employer except for the result. Before an employer can determine how to treat payments it makes for services, the employer must first know the business relationship that exists between employer and the person performing the services.
The person performing the services may be an independent contractor or an employee. Simply because an employer refers to a worker as an independent contractor or he or she has agreed to the arrangement in a written contract does not mean that the individual is correctly classified as an independent contractor. Likewise, the fact that payments are issued by accounts payable rather than the payroll department also does not mean that the person is an independent contractor. The nature of the relationship between the individual and the employer is the true determinant, and misclassification can result in serious consequences for an organization.
In Mary's case, the scenario is vague and may need a little more information in order to give an accurate assumption on whether or not Mary is a contractor or an employee. Mary was hired for a special programmer project as...