Determine if a Candidate is an Independent Contractor or a W-2 Employee

The IRS has outlined the three main criteria for determining correct worker classification that you will want to refer to whenever you are in doubt about how to classify contract candidates. The main thing to keep in mind is that the more control the client company will have over the contractor’s work, the more likely that the worker should be classified as a W-2 employee.

Here are some hints that a worker may be a W-2 employee rather than an Independent Contractor:

  • The company dictates how, when, and where the work must be performed.
  • The company provides equipment and tools.
  • The worker is not providing services to other companies.
  • The company reimburses expenses.
  • The worker is paid on an hourly or weekly basis rather than a flat fee for completing the project.

Remember, if you do determine that a contract candidate should be classified as a W-2 employee, you don’t have to handle the employment tasks and issues yourself.  NEW SOURCE RECRUITING has the perfect solution to relieve you of the stress associated with maintaining contract employees.  Our back office takes care of the onboarding paperwork, background checks, drug testing (if applicable),  payroll and payroll taxes, workers’ compensation, and even offers a 401k plan and health benefits to the contract employees we provide you with.  Our goal is not only to help you find the right candidates, we also save you thousands of dollars over the course of a year by handling all of the above so that you can focus on what you do best and grow your business!