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Richard, Attorney
Category: Business Law
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Experience:  32 years of experience practicing law and a businessman.
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I am starting a graphic design/business identity design company and basing it in Florida.

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I am starting a graphic design/business identity design company and basing it in Florida. My partner lives in Kansas and my sales director lives in California. We will be paid by the job and so will myself, my partner, and my sales guy. Will we be considered employees or independent contractors?
Submitted: 3 years ago.
Category: Business Law
Expert:  Richard replied 3 years ago.

Good afternoon. It's not a simple black and white issue, but I would think based on what you say you would qualify as independent contractors.

 

 

Whether or not the IRS will accept the LLC's treatment of someone as an employee or as an independent contractor is a question of many facts and circumstances involving control and independence. These factors fall into the following categories:

Facts that provide evidence of the degree of control and independence fall into three categories:

  • 1. Behavioral Issues: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  • 2. Financial Issues: Are the business aspects of the worker's job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  • 3. Relationship Issues: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

All these factors must be considered when making the determination of how to classify a worker. Some factors may weigh in favor of "employee" status, while other may point to "independent contractor" status. There is no "magic" or set number of factors that "makes" the worker an employee or an independent contractor, and no one factor stands alone in making this determination. The entire relationship must be considered to determine the degree the right to direct and control. The more control, the more it favors "employee" status.

 

 

I hope this has given you the guidance you were seeking. I wish you the best of luck!

 

If you have a follow-up question, please remember that there might be a delay between your follow up questions and my answers because I may be helping other clients or taking a break.

 

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If you need additional clarification on this question after clicking ACCEPT, please do not hesitate to click Reply and I will be happy to do what I can to help you further. Thanks for allowing me to be of service to you.

 

The information given here is not legal advice. As all states have different intricacies in their laws, the information given is general only. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.

 

Customer: replied 3 years ago.
If they are classified as independent contractors do I need to take their state taxes out or is that something they do after I pay them for the sale or service rendered?
Expert:  Richard replied 3 years ago.
If they are independent contractors, you don't need to take anything out. You simply pay them and they are responsible for everything else.
Richard, Attorney
Category: Business Law
Satisfied Customers: 47048
Experience: 32 years of experience practicing law and a businessman.
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