DAYSPA is the business resource for spa & wellness professionals! Each issue covers the latest in skin care, spa treatments, wellness services and management strategies.
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dayspamagazine.com/freeinfo dayspamagazine.com • september 2017 • [ 83 ] Opportunity for profi t or loss. ICs take risks and experience the benefi t or the detriment of profi t or loss. Employees typically take no such risks and the business owner absorbs any potential profi ts or losses. Services available to the market. ICs are usually free to seek other work without limitation on the number of contracts into which they may enter. Employees would be expected not to work simultaneously for another employer, particularly one who could be considered a competitor. Method of payment. ICs typically contract for a set or fi xed fee for their services, while employees are generally paid hourly wages. Working Relationship The type of relationship between a worker and a business also helps to establish whether the worker is an employee or IC. The factors that determine a relationship are: Written contracts. The existence of a written contract is often relied upon by employers. Some believe that they may specify the worker status in a contract. However, written contracts are frequently ignored by the IRS when determining a worker's status, i.e., an agreement between a worker and a business cannot trump the legal analysis in determining the actual type of relationship. Employee benefi ts. If a worker receives benefi ts that go above and beyond their monetary compensation, it suggests an employer/employee relationship. Permanency of the relationship. If the relationship is ongoing rather than extends over the period of time in which a distinct task is performed, it again suggests an employer/employee relationship. Services provided as key activity. If the services a worker provides are part of the core business activities, this suggests an employer/employee relationship. Contrast this with a task that may be needed but is somewhat ancillary to the business' core purpose. (Again, recall the computer programmer, whose task wasn't central to the delivery of spa services.) Sometimes, the analysis doesn't yield clear-cut results. For example, what if the factors are evenly split, half pointing to IC status and half pointing to employee status? In this case, it's a good idea to let another set of eyes look at the issue as the business owner may not be objective enough to accurately apply the analysis to the given facts. In such instances, it's best to consult an attorney or company specializing in human resource management. u Visit us at ICES Long Beach CA Sept. 10-11, Booth# 340 IECSC FT. Lauderdale Fl. Sept. 24-25, Booth# 208