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.
Title: New York Contract with Veterinarian Assistant as Independent Contractor with Provisions for Termination with or without Cause Introduction: In New York, contracts with veterinarian assistants as independent contractors play a crucial role in delineating the terms and conditions of their engagement. This comprehensive agreement establishes a clear framework for the working relationship, outlining the rights, obligations, and potential terminations for both parties involved. Below are the key provisions typically included in such contracts, with relevant keywords to ensure clarity and compliance. 1. Agreement Overview: The agreement begins by stating the nature of the contract, explicitly identifying it as a legally binding agreement between the veterinarian and the veterinary assistant acting as an independent contractor. 2. Term of Engagement: This section specifies the duration of the engagement, whether it is a fixed term or an open-ended agreement, along with any renewal provisions. 3. Scope of Work: The scope of work defines the responsibilities and tasks that the veterinarian assistant is expected to perform, emphasizing the importance of professional standards and regulatory compliance. Keywords: veterinary care, animal care, medical assistance, administrative tasks. 4. Independent Contractor Status: To clarify the employment relationship, it is essential to state explicitly that the veterinarian assistant is an independent contractor, not an employee. This section outlines the rights, responsibilities, and liabilities of both parties, emphasizing the contractor's autonomy in performing their duties. 5. Compensation and Expenses: This provision details the agreed-upon compensation structure, including whether the assistant will be paid on an hourly, per task, or commission basis. Additionally, the agreement may address reimbursement for authorized expenses incurred during the course of their duties. 6. Confidentiality and Non-Disclosure: Confidentiality provisions protect the veterinarian's proprietary information, patient records, and trade secrets. It requires the assistant to maintain strict confidentiality during and after the termination of the contract. 7. Termination with Cause: This section outlines the grounds for termination with cause, such as breach of contract, failure to meet performance standards, or violation of professional ethics. It provides both parties with the ability to terminate the agreement if justified. Keywords: breach, non-performance, misconduct. 8. Termination without Cause: To allow flexibility for both parties, this provision establishes the right to terminate the contract without cause, typically with advance notice. Keywords: termination notice, notice period. 9. Indemnification and Liability: This section addresses the responsibilities of each party for any damages, liabilities, or claims arising from their respective actions or omissions. It clarifies the extent to which one party may be held financially accountable for any errors or misconduct of the other. 10. Governing Law and Jurisdiction: These provisions identify New York as the governing law under which the contract operates and specify the jurisdiction where any dispute resolution proceedings must take place. Types of New York Contracts with Veterinarian Assistants: 1. Fixed-Term Independent Contractor Agreement: This type of contract has a predetermined start and end date, after which the contract can be renewed or terminated based on the agreed-upon provisions. 2. Open-Ended Independent Contractor Agreement: This agreement does not have a fixed duration and allows both parties to continue the engagement until it is terminated according to the agreed-upon provisions. Conclusion: A properly drafted contract between veterinarians and their independent contractor veterinary assistants is crucial for establishing a transparent and mutually beneficial working relationship in New York. These contracts define the rights and responsibilities of both parties and provide provisions for termination, with or without cause, ensuring legal compliance and protecting the interests of all involved.
