Employee and Per Diem Contractor

Donna Rae · December 2002

Can an employee who works half time for an agency also be an independent contract for the other 50 percent of their work time for the same agency?

Don D · December 2002

It may look suspect at minimum; however, it's often done. Think how many employees there are who cut the company grass or stuff mail at night on a contract basis. If the job the individual does as a contractor meets the definitions of independent contractor, it should not present a conflict with the rules. The real rub comes when you have a full time worker and you two agree that he'll continue after he punches out or on weekends to do regular work at the company on a contract basis and what you're managing to do is avoid paying due overtime. My opinion only. x:-)

Donna Rae · December 2002

Thank you. We actuallyhave two Court Reporters who job share one position, but on their off time they want to be Per Diem and be paid contract wages. My take is that since we are supplying the paper, the office, the necessities for them to perform their function they are not "independent contractors".

Don D · December 2002

Lots of court reporters are totally independent contractors, as you know. But, if your agency employs them, provides the supplies, sets the hours, directs the work, can hire and fire them and they're performing work that is an ongoing, integral part of the business, they're generally not independent contractors. if these part time people's job duties don't change and all they are doing is getting a contract rate, I don't think they qualify and you'd be putting the agency at risk if you go along with their request. On the other hand, the agency might want to consider the advantages of making these independent contractors altogether and not having those positions in the staffing plan.

Margaret Morford · December 2002

Even if they are legimately independent contractors, the fact that they get a W-2 and a 1099 from the same employer guarantees that they will be audited by the IRS. It's an absolute red flag. Because of this, we always switched contractors to employees and vice versa on January 1st of each year to try to avoid an employee getting an IRS audit.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Employee and Per Diem Contractor

Comments