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!
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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.