Independent Contractor Versus Employee Classification

Whether a worker is an employer or an independent contractor is determined by several factors.

The United States Internal Revenue Service (“IRS”) provides a test to determine whether a worker is an independent contractor or an employee. The IRS test involves several factors including, inter alia;

1.         whether the business has retained the right to control the details of a worker’s performance such as when and where to do work, what work must be performed by a specific individual, what order or sequence to follow, and what tools or equipment to use;

2.         whether the worker has an investment in the work beyond his own time;

3.         the extent the worker makes services available to other businesses; and,

4.         whether the employee has a guaranteed regular wage amount for hourly, weekly, or another period of time.

An analysis of NMSA §51-1-42 F(5) also sheds light on the issue of whether  a worker is an independent contractor or an employee. NMSA §51-1-42 F(5) provides exceptions to New Mexico’s Unemployment Compensation Law to independent contractors defining independent contractors as those who:

1.         have been and will continue to be free from control or direction over the performance of their services;

2.         the services are outside the usual course of business for whom the services are performed; and

3.         the individual is customarily engaged in an independently established trade occupation, profession or business of the same nature as that involved in the agreement to provide service to the purchaser of services.

As shown above, several factors help determine whether a worker is an employee or an independent contractor. If you a worker and feel your employer has misclassified you as an independent contractor, call The Furth Law Firm, P.A.