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.
Harris Texas Contract with Veterinarian Assistant as Independent Contractor with Provisions for Termination with or without Cause (Sample Agreement) This Harris Texas contract is designed specifically for veterinarians looking to hire an assistant on an independent contractor basis, while offering provisions for termination with or without cause. The agreement ensures a clear understanding between the parties involved, emphasizing the rights and responsibilities of both the veterinarian and the assistant. Key Elements of the Harris Texas Contract with Veterinarian Assistant as Independent Contractor: 1. Parties Involved: Clearly state the names and addresses of both the veterinarian (referred to as the "Contractor") and the assistant (referred to as the "Assistant"). 2. Scope of Work: Outline the specific duties and responsibilities of the assistant, such as providing support during consultations, assisting in surgical procedures, administering medications, performing laboratory tests, and other tasks related to veterinary care. 3. Independent Contractor Relationship: Highlight the assistant's status as an independent contractor, not an employee, clarifying that they are responsible for their own taxes, insurance coverage, and licensure. 4. Compensation and Payment: Specify the agreed-upon payment terms, whether it's an hourly rate, a flat fee per task, or a percentage of the veterinarian's revenue, and indicate the frequency and method of payment. 5. Termination Clause: Determine the conditions under which termination may occur. This contract allows for termination with or without cause. Termination with cause might include breach of contract terms, negligence, or unethical behavior. Termination without cause typically implies the right to terminate the agreement without specifying any reason. 6. Notice Period: Specify the notice period required for termination, allowing both parties sufficient time to make necessary arrangements. It is typically one to two weeks, but can be adjusted based on mutual agreement. 7. Confidentiality and Non-Disclosure: Include a section regarding the protection of confidential information acquired during the assistant's tenure and emphasize the importance of maintaining client and patient privacy. 8. Governing Law and Jurisdiction: State that the contract is governed by the laws of the State of Texas, and any legal disputes shall be resolved in the local courts of Harris County, Texas. Types of Harris Texas Contract with Veterinarian Assistant as Independent Contractor with Provisions for Termination: 1. Standard Harris Texas Contract with Veterinarian Assistant: This is the general agreement used for onboarding a veterinarian assistant as an independent contractor with provisions for termination with or without cause. 2. Modified Harris Texas Contract with Veterinarian Assistant: This contract is customized to meet the specific needs or preferences of the veterinarian or the assistant, including revised compensation terms, exclusive services, or additional responsibilities. 3. Renewal Harris Texas Contract with Veterinarian Assistant: This agreement is applicable when both parties wish to extend their working relationship beyond the initial contract term. It emphasizes the continuation of the original agreement, while updating any necessary information or terms. Remember, this sample contract is for reference purposes only. It is crucial to consult with a legal professional to ensure compliance with Harris County and Texas state laws, as well as any specific regulations related to the veterinary field or independent contracting.
