{"id":33270,"date":"2016-03-31T19:22:19","date_gmt":"2016-04-01T00:22:19","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/independent-contractors-in-illinois.html"},"modified":"2017-10-10T09:03:28","modified_gmt":"2017-10-10T14:03:28","slug":"independent-contractors-in-illinois","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/human-resources\/independent-contractors-in-illinois.html","title":{"rendered":"Independent Contractors in Illinois"},"content":{"rendered":"
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The liability for a worker depends on whether or not the worker is classified as an employee or an independent contractor<\/a>. Further, liability can be different at the state and federal level because of differences depending on their status.<\/p>\n

What Is the IRS Definition?<\/b><\/p>\n

First of all, the IRS defines<\/a> the employer\/employee relationship under common law rules. A worker is an employee, if the person for whom he works has the right to direct and control his work both as to the final results and as to the details of when, where and how the work is to be done, regardless of whether control is actually exercised.<\/p>\n

The basic factors that exhibit control are whether the employer has the ability to hire and fire the worker.
\nBasic factors of employer-employee relationship.<\/p>\n

Further, the worker must devote full time to the business of the employer. In addition, the relationship between the employer and the worker must be of a continuing nature. Other evidences of control are training and integration of services.<\/p>\n

Finally, if the employer provides a place, the tools and means to accomplish the work.
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\nIRS Procedure in Determining Tax Liability<\/b><\/p>\n

Once an IRS audit for underpayment or nonpayment of taxes is triggered, the IRS will make a determination under the guidelines and common law rules whether or not workers can be considered employees or independent contractors<\/a>.<\/p>\n

If there is a determination that the worker is an independent contractor, then the company has no liability. The IRS looks to the individual worker for payment of applicable taxes.<\/p>\n

If there is a determination that the worker is an employee, then the IRS will calculate all outstanding tax withholdings owed. The IRS will permit the company to establish whether the individual worker has paid any such taxes. If such taxes have been paid, the total liability will be reduced by the amount paid. However, the company has the burden of gathering and providing this information to the satisfaction of the IRS.<\/p>\n

Liability for State Employee "Head Taxes" (e.g. Unemployment) and Overtime<\/b><\/p>\n

A company is not responsible for unemployment<\/a>, compensation or overtime<\/a> for an independent contractor. Under Illinois law, a temporary service company is responsible for payment of unemployment, compensation, and overtime of a temporary\/project contractor unless the contractor<\/a> was in business for himself and worked for clients other than the company’s clients.<\/p>\n

Triggering of Other Audits<\/b><\/p>\n

The filing for a worker’s compensation claim or filing for state unemployment relief will often trigger an audit by that agency and may well trigger audits by both the IRS and the state taxing authority regarding withholding issues.<\/p>\n

Ownership of Ideas and Inventions of Your Independent Contractors<\/b><\/p>\n