Last month, we compared independent contractor and employment relationships. The nature of the relationship between a worker and company depends on the circumstances. Greater control over workers and the performance of their work tends to point towards employment, whereas less control points to independent contracting. Rarely is the distinction clear.

In their audits, government agencies apply different standards. Thus, they can reach different conclusions. The IRS considers 14 factors in its analysis. Some agencies may consider 25 or more factors; some agencies consider fewer. No one factor is determinative. If the government reclassifies the workers, it can result in large penalties. The level of scrutiny and outcome may be politically motivated.

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