We're often asked the difference between employee and freelance stagehands. It's curious how many stagehand's don't understand the basic pros and cons of taking on a job(s) that impact how they may be classified. Frankly, there can be a number of subtle or intrinsic benefits (or challenges) associated with every classification. We've listed and detailed some of the basics below, and we welcome your thoughts and opinions.
We've narrowed down the broad range of classification to 4 basic categories:
1. Union Member, Temporary Employees
2. Non-Union, Regular Employees
3. Freelance Independent Contractors
There are a number of subgroups under these three categories, such as Permalancers, Contract Employees, Seasonal Employees, Part-Time, Full-Time, etc. Of course there are variations and exceptions to many situations, but for the most part, they all fall into these three basic categories and the pros & cons are the most common for that group.
Determining Independent Contractor Compliance
It's alarming how few freelancers are aware that there is a mandate for employers to comply with strict, but loosely defined, rules when hiring freelance stagehands - identified as independent contractors. It's not surprising however, since even those employers, HR specialists, labor specialists and even the independent contractors themselves argue over their interpretation of the rules. The guidelines, applicable state and federal laws and regulatory and legal requirements are a constant topic among our team, and we want to open the conversation up to our entire community and ensure all our colleagues and clients are aware of the current guidelines.
There 20 factors used by the IRS to determine whether an employer has enough control over a worker for that worker to be classified as an employee, rather than a contractor. Though these rules are intended only as a guide - the IRS says the importance of each factor depends on the individual circumstances - they are helpful in determining whether our relationships demonstrates an employer-employee relationship. When the answer is “Yes” to the first four questions, you can typically satisfy compliance as an independent contractor; “Yes” to any of questions 5 through 20 means we will need to classify you as an employee, subject to backup withholding, among other requirements.
1. Profit or loss. Can the worker make a profit or suffer a loss as a result of the work, aside from the money earned from the project? (This should involve real economic risk-not just the risk of not getting paid.)
2. Investment. Does the worker have an investment in the equipment and facilities used to do the work? (The greater the investment, the more likely independent contractor status.)
3. Works for more than one firm. Does the person work for more than one company at a time? (This tends to indicate independent contractor status, but isn’t conclusive since employees can also work for more than one employer.)
4. Services offered to the general public. Does the worker offer services to the general public.
5. Instructions. Do you have the right to give the worker instructions about when, where, and how to work? (This shows control over the worker.)
6. Training. Do you train the worker to do the job in a particular way? (Independent contractors are already trained.)