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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55716
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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Treasurer of a HOA does bookkeeping service for the HOA & Water

Customer Question

Treasurer of a HOA does bookkeeping service for the HOA & Water co which are 2 separate entities. She is paid as an independent contractor, and her services do fall under many of the IRS criteria for constractor status. A homeowner is insisting that since she is an officer, she should be paid as an employee....is she correct?
Submitted: 6 years ago.
Category: Real Estate Law
Expert:  Richard replied 6 years ago.

Good morning. There is no black and white answer...it is based on facts and circumstances. The homeowner's assessment is not necessarily any more determinative than the determination of the association and its board. The IRS has a list of the following 20 factors that they evaluate...and no one factor is critical...

 

 

The 20 factors used to evaluate right to control and the validity of independent contractor classifications include:

  • Level of instruction. If the company directs when, where, and how work is done, this control indicates a possible employment relationship.
  • Amount of training. Requesting workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which work is accomplished.
  • Degree of business integration. Workers whose services are integrated into business operations or significantly affect business success are likely to be considered employees.
  • Extent of personal services. Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone.
  • Control of assistants. If a company hires, supervises, and pays a worker's assistants, this control indicates a possible employment relationship. If the worker retains control over hiring, supervising, and paying helpers, this arrangement suggests an independent contractor relationship.
  • Continuity of relationship. A continuous relationship between a company and a worker indicates a possible employment relationship. However, an independent contractor arrangement can involve an ongoing relationship for multiple, sequential projects.
  • Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees.
  • Demands for full-time work. Full-time work gives a company control over most of a person's time, which supports a finding of an employment relationship.
  • Need for on-site services. Requiring someone to work on company premises-particularly if the work can be performed elsewhere-indicates a possible employment relationship.
  • Sequence of work. If a company requires work to be performed in specific order or sequence, this control suggests an employment relationship.
  • Requirements for reports. If a worker regularly must provide written or oral reports on the status of a project, this arrangement indicates a possible employment relationship.
  • Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is more characteristic of independent contractor relationships.
  • Payment of business or travel expenses. Independent contractors typically bear the cost of travel or business expenses, and most contractors set their fees high enough to cover these costs. Direct reimbursement of travel and other business costs by a company suggests an employment relationship.
  • Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding.
  • Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast, most employees rely on their employer to provide work facilities.
  • Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees.
  • Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors.

 

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Please be aware that the information provided here is not legal advice. Rather it is simply general information. All states have different intricacies in their laws and any information given is simply general information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you. I hope this answer has been helpful to you.