Considerations When Using Independent Contractors Katie Kiernan Marble Marble Law Firm, PLLC 80 Palomino Lane Suite 201 Bedford, NH 03110

Disclaimer The information provided to you today is general in nature and not intended to constitute legal advice. If you have questions regarding how this information applies to a specific circumstance, you should seek legal counsel.

Employee v. Independent Contractor  Very important to get this right – State and Federal Agencies are highly focused on this right now  Three relevant tests  NH Department of Labor – 7 point test  NH Employment Security – 3 point test  IRS  What happens if you get this wrong?  Fines/penalties  Responsible for unpaid unemployment taxes  Responsible for unpaid federal withholdings

New Hampshire Department of Labor Test  Independent contractors must meet ALL of the following criteria:  The person possesses or has applied for a federal employer identification number or social security number, or in the alternative, has agreed in writing to carry out the responsibilities imposed on employers under this chapter.  The person has control and discretion over the means and manner of performance of the work, in that the result of the work, rather than the means or manner by which the work is performed, is the primary element bargained for by the employer.  The person has control over the time when the work is performed, and the time of performance is not dictated by the employer. However, this shall not prohibit the employer from reaching an agreement with the person as to completion schedule, range of work hours, and maximum number of work hours to be provided by the person, and in the case of entertainment, the time such entertainment is to be presented.

New Hampshire Department of Labor Test  The person hires and pays the person’s assistants, if any, and to the extent such assistants are employees, supervises the details of the assistants’ work.  The person holds himself or herself out to be in business for himself or herself or is registered with the state as a business and the person has continuing or recurring business liabilities or obligations.  The person is responsible for satisfactory completion of work and may be held contractually responsible for failure to complete the work.  The person is not required to work exclusively for the employer.

New Hampshire Employment Security Test  Independent Contractor if:  The individual has been and will continue to be free from control or direction over the performance of the services;  The service is either outside the usual course of business for which such service is performed or is performed outside of all the places of business of the enterprise for which such service is performed;  The individual is customarily engaged in an independently established trade, occupation, profession or business.

IRS  Behavioral  Financial  Type of Relationship

IRS  Behavioral  Types of Instruction Given  When/where to do the job  Tool/equipment  Assistants  Requirement to buy supplies at a certain place  Specific individual?  Order/Sequence  Degree of Instruction  Evaluation System  Training

IRS  Financial  Significant Investment  Unreimbursed expenses  Opportunity for profit or loss  Services made available to the marketplace  Method of Payment

IRS  Type of Relationship  Written Contracts  Employee Benefits  Permanency of the Relationship  Services Provided are Key Activity of the Business

Considerations When Using Temporary and Leased Employees  Joint Employment  FMLA and other federal employment laws  OSHA Guidance on Temporary Worker Safety  Carefully define relationship and make sure all parties understand their rights and responsibilities

Contact Information Katie Kiernan Marble linkedin.com/katiekiernanmarble Marble Law Firm, PLLC 80 Palomino Lane Suite 201 Bedford, NH nhemploymentlaw.com