We have an independent contractor that sells travel - we are a travel agency. She was just hired as an employee now... can she continue as an independent contractor and also be an employee for the same company? I don't think so but our HR department is thinking that she can.

Yes, there is absolutely no reason why she can't be independent and be on the payroll of a company. It is her choice how she handles her taxes and finances.

Hello f:

What changed? If the work was getting done when she was a contractor, why did you HIRE her? She can't be both. One has taxes taken out of their wages.. The other gets paid per the project. Once has to put in hours. The other doesn't. One has to show up at the office. The other doesn't. Plus you have to MATCH her unemployment insurance payment, so it costs you MORE to have her as an employee. If it doesn't work out, that rate goes UP. So I don't know WHY you did what you did.

excon

Hi exxy, I have been both, I still have to pay taxes on what I earn under the table and pay my Canada Pension. At my salaried job, they deduct all pertinent payments.

I have to get used to the US being a different entity in this regard. I guess we are more liberal here in Canada with more opportunities to make a buck nowadays.

Tick

Iriefox, if your situation is within the US, the following link will give you a bit of guidance...

http://www.irs.gov/businesses/small/article/0, id=99921,00.html

For US federal tax law, anyone performing services for your travel agency will need to be classified as either employee or as an independent contractor, as explained at that IRS site. As you can see from the given info, these are mutually exclusive choices with respect to any particular job description. In other words, a person could indeed be both an employee and an indy, but only if such person is performing two completely different services for the company, one of which qualifies as independent, and the other has employee-employer status. In the more typical case in which the individual wears just one hat for your company, then the person will have to be classified as one or the other; both is not an option.

As you see from the info at the IRS site, the answer turns on the nature of the services performed, and other facts and circumstances of the given arrangement. IRS doesn't provide hard-and-fast rules in making the determination, only a set of criteria to be considered in each case. Thus it comes down to a judgement call that you'll make after weighing all the particulars of the situation.

I have NO idea why they hired her as an employee. I appreciate all the answers. I have been trying to tell him that she can't be both but either he doesn't believe me or doesn't care. I will definitely forward all these answers to him... maybe then he will believe me or start caring :) Thanks again.

I've worked as an IC for a hospital doing medical transcription for 15+ years.

I'm looking at an employee position (part-time) in a completely different department in the same hospital, nothing to do with transcription, to make extra money.

Can I do that?