Managing Vendors – Articles by Jim Everett

Tips on managing vendors, skills and competencies required

Is a Contractor an Employee?

Posted on | March 15, 2009 | CLICK HERE TO COMMENT OR ASK QUESTION


“If a contractor works like an employee, and is treated like an employee…”

Independent Contractor status and reporting to the IRS comes into sharp focus when a client directly engages an individual worker, or consultant, to perform work on a project, or in a continuing role. It can also be a concern when engaging a smaller provider (such as an LLC), where a number of people are assigned full-time to a client, and work onsite.

The IRS uses criteria to determine if a vendor or individual is classified as an independent contractor or is deemed to be an employee of the client. A general rule is an individual is classified as an independent contractor if the client has the right to control or direct only the result of the work and not the means and methods of accomplishing the result. Under common law, anyone who performs services may be deemed an employee if the client has the right to control what will be done, where it will be done and how it will be done.

But there is more. And the risks of ignoring these IRS requirements can be great, including fines and payment of back taxes and benefits. How can clients ensure that the outside resources they engage are independent, and avoid exposure and risk of costly surprises from IRS audits?

It is no longer the famous “20 Questions”. The new criteria are simpler, more straightforward, but more open to experienced interpretation. Think180 has summarized the requirements in an article, and included links to the latest IRS materials.

Read and download the article here.



Leave a Reply

About Think180

Think180 helps companies get the best results with their service providers (vendors). Our core product is an in-house customizable workshop for Delivery Managers, or entire teams who outsource. This has been run successfully for many clients, including Palm, Philips, Harrah's, BP, Vantive, Avaya and others.

We now also offer live and interactive videoconference services - Training Modules for team events, and 1:1 coaching for individuals with videochat (desktop and mobile) on managing vendors.

Call 310.694.0414 for more information to see if this service could be of value to you.

Subscribe to this blog


Email Author