If you hire a security guard for an event, is he considered an employee or a contractor?
That’s a difficult question to answer without some very specific facts. The determination as to whether a worker is an independent contractor or an employee is whether the business has the right to direct and control a worker. And there are many factors that go into it; but we basically break the factors down into three categories of evidence, which are behavioral control, financial control, and relationship with the parties.
Factors the Affect Independent Contractor Status
There are many questions that go into that, such as for behavioral control, whether the business directs the worker as to what time they need to show up; whether they need to wear a uniform; and whether they are required to submit reports; and basically how the worker performs his services. For financial control, that will depend upon the method of payment and whether the worker has the ability to show a profit or loss from performing those services. And when we look at the last part, the relationship of the parties, we look at things like what was the intent of the parties? Did they both have the same understanding as to whether the worker was an independent contractor or employee, whether the business is providing benefits, if there was a contract between them? So there is no simple answer to that. The only way to make that determination is to go through the various factors. And when you look at the various factors, some factors will point toward independent contractor status; and some factors will probably point toward employee status. But you have to look at the overall result of looking at that to determine whether the business has the right to direct and control. And one of the significant factors that you look at when making a determination as to whether a business has the right to direct and control is whether that worker is an integral part of the payer’s business. Because obviously, the more important that worker is to that business, the more likely it is that that business will direct and control that worker as to what services they perform.
Is a Security Guard an Employee or Contractor?
But if a business isn’t sure whether a worker is an independent contractor or employee, we do have a form. Businesses can write to the IRS; it’s Form SS-8. It basically walks through a series of questions which are directed toward the right to direct and control. And the business can complete that and receive what’s called a Determination Letter from the IRS, in which we will then tell you whether we believe that the worker is an employee or independent contractor.
Filing Form SS-8
If the owner of the business is confused and they go and they look through the criteria and they still cannot decide if this person is an employee or a contractor, then the SS-8 can be completed, sent into the IRS; and we’ll give them a response to help them out in that situation about the determination.
Determining Worker Status with Form SS-8
It’s really a good service to have. And businesses can use it. And in addition, individuals can use it also. So individuals who are treated either as – in most cases what we see is individuals who are treated as independent contractors who believe they may be employees can write in for the same determination and get a Determination Letter from the IRS as to whether they really, truly are an independent contractor or whether the business should be treating them as an employee.