As a small business owner you may hire people as independent contractors or as employees. There are rules that will help you determine how to classify the people you hire. This will affect how much you pay in taxes, whether you need to withhold from your workers paychecks and what tax documents you need to file.
Here are some things every business owner should know about hiring people as independent contractors versus hiring them as employees:
1. The IRS uses three characteristics to determine the relationship between businesses and workers:
" Behavioral Control covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means.
" Financial Control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job.
" Type of Relationship factor relates to how the workers and the business owner perceive their relationship.
If you have the right to control or direct not only what is to be done, but also how it is to be done, then your workers are most likely employees.
2. If you can direct or control only the result of the work done -- and not the means and methods of accomplishing the result -- then your workers are probably independent contractors.
3. Employers who misclassify workers as independent contractors can end up with substantial tax bills. Additionally, they can face penalties for failing to pay employment taxes and for failing to file required tax forms.
4. Workers can avoid higher tax bills and lost benefits if they know their proper status.
5. Both employers and workers can ask the IRS to make a determination on whether a specific individual is an independent contractor or an employee by filing a Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS.
Hawaii offers several types of contracts for veterinarian assistants who work as independent contractors with provisions for termination with or without cause. These contracts outline the agreement between the veterinarian assistant and an animal care facility or veterinary practice. Here are detailed descriptions of some common types of contracts: 1. Veterinary Assistant Services Agreement: This contract establishes the terms and conditions under which the veterinarian assistant provides services to a veterinary practice. It includes provisions for termination with or without cause, specifying the circumstances that may prompt termination, such as breach of agreement, misconduct, or failure to meet performance expectations. The agreement also covers compensation, work schedule, confidentiality, and any additional clauses deemed necessary. 2. Veterinary Assistant Independent Contractor Agreement: This contract outlines the arrangement between the veterinarian assistant and a specific animal care facility. It includes clauses related to conduct, professional liability insurance, indemnification, and compliance with local, state, and federal laws. Termination provisions cover both voluntary termination by the veterinarian assistant and termination by the animal care facility for cause or without cause. The contract may also include provisions for dispute resolution and non-compete clauses. 3. Veterinarian Assistant Services Contract with Veterinary Hospital: This contract is typically used when an independent veterinarian assistant is contracted by a veterinary hospital for a specific period or on a project basis. It specifies the assistant's scope of work, duties, and responsibilities, along with details about compensation, confidentiality, and non-disclosure. Termination clauses cover both parties and outline the conditions for termination with or without cause, including notice periods and potential financial penalties. 4. Veterinary Assistant Contractor Agreement with Animal Rehabilitation Center: This contract is designed specifically for veterinary assistants working in an animal rehabilitation center. It includes provisions related to the assistant's responsibilities, tasks, and hours of work. The termination provisions cover both the assistant and the rehabilitation center, allowing termination with or without cause, based on a set of predefined conditions. The agreement may also address liability, confidentiality, and non-solicitation of clients. These are just a few examples of the various types of contracts available for veterinarian assistants working as independent contractors in Hawaii. It is essential for both parties to carefully review and negotiate the specific terms and conditions to ensure a mutually beneficial agreement that aligns with their professional expectations and legal requirements.
