I am opening a nail salon and am finding that most manicurists will not consider being hired if I don't pay them on a commission basis, i.e. they do not want to be paid a wage. I understand that there is no clear-cut line between being an independent contractor vs. an employee, but are there steps I need to take to ensure that they are being properly classified as independent contractors? Are there specific things I need to be saying to them so they are clear that they are independent contractors? If I were to take these steps, is there any certainty that if one of them were to sue me that they weren't really an independent contractor, rather an employee, that I would prevail? Is there any certainty that if I take these steps, the IRS doesn't come after me for back payment of employer taxes?
Thank you for your fast and thorough response.
I understand more clearly now. If I make a suggestion, it is merely that. I cannot really make it a "standard" because if I do, I am toeing the line of an employer-employee relationship?
If I made a suggestion as to, for example, how often they clean their tools, but then do not penalize them if they do not follow that suggestion, would that be okay?
Last, if I more 80/20, in that 80% of what I do is clearly treating them as independent contractors, but maybe 20% of the time I do things, like requiring them to clean their tools a certain way, do you find that courts and/or the IRS weigh in favor of independent contractor status? Or are they more likely to penalize me for failing to classify them as employees? In other words, are they more prone to side on the side of the employee if some, but not majority, of what I do is of an indep contractor status?
I hope that makes sense.
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