The independent contractor “Hire”, is an area that is getting increased scrutiny in Florida by the State because Florida needs money. So, you must be aware and proactive in how you document worker status. Please keep in mind that a re-classification by the State will most likely lead to a Federal audit a few months later(they exchange information). So what steps you take now before an audit commences is crucial to your companies financial survival. From strictly a Florida law standpoint the following factors are crucial in determing independent contractor status:
- The worker maintains a separate business with his or her own work facility, truck, materials equipment, materials or similar accommodations
- The worker and/or his company has an occupational license and has or applied for a federal employer identification number (unless the independent contractor is a sole proprietor who isn’t required to have a federal employer ID number)
- The workers' company rather than the individual worker gets paid for services and has bank accounts in the name of the business entity for purposes of paying business expenses
- The Worker can freelance between the employer under audit, customers and other employers,
- The worker or his/her company is paid on a per job basis subject to written standards
Other secondary fact patterns that support independent contractor classification under state law are as follows:
- The worker performs specific services or work for a specific amount of money and controls the means of performing the services or work and absorbs the expense related to performing services
- Worker "must make it right" at no additional expense to the Employer if initial work is not up to snuff
- Worker compensation is based on a per job or commission basis and is at risk to generate a profit
- May realize a profit or suffer a loss in connection with performing work or services and has other ongoing business obligations
- Has a license or skill necessary to perform the job without Employer direction or ongoing
- Who supplies the necessary tools to perform the job and the length of time the job takes. Can the worker perform services for others at the same time frame or is it an exclusive relationship?
These are the factors that will weigh heavily in a Florida determination. It is most helpful to your classification, to have a properly drafted Independent Contractor agreement in place as well as copies of all relevant worker licenses,insurance etc.
If I can help you with these or any other matters, please feel free to call me at 954-981-6533