An independent contractor is an individual issued a contract to provide services to a different body as a non-employee. An independent contractor is also known as a freelancer in their specialized field of work (Allen, 2013). An employee hired for a specific job on an agreed upon rate of pay. An employee contracted by the company is not considered a permanent employee or a regular addition to the company staff. Some rules distinguish between an independent contractor and an employee. One of the differences is that state employment and labor laws always cover an employee while an independent contractor is not covered by any state employment laws, meaning that the independent contractor can come up with their set of rules depending on the work issued.
Another difference between the two is that an employee contractor completes an application that is conducted by the Human Resource Department while an independent contractor interacts directly with the person that wants the service concluded (Allen, 2013). The tax documents of an employee contractor involve the number of exemptions on a W-2 while that of an independent one consists of certification about backup withholding on a W-9. The value of work is also a distinguishing factor in that; the employee earns either a salary or an hourly rate while the independent contractor is mostly on an agreed total amount with the person who needs the task completed (Kirby, 2003). An employee is also required to report all the money paid by the employee during the tax year while the independent contractor says payment of six hundred dollars or more in a calendar year.
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An employee pay period is always the same unless the employer formally changes it while an individual contractor operates depending on the contract (Kirby, 2003). The employee is also required to report to the federal unemployment insurance while the independent contractor is not required to do so.
According to this case scenario, Joan should be treated as an independent contractor since the agreement was that Joan would work as an independent contractor and she had agreed that her business is an independent contractor in Madrid and Berne accounting company. The determining factor in this scenario is the contract formed between Joan Newman Business services and Madrid and Berne. The two companies agreed that Joan would be an independent contractor and that Joan would issue services to the clients as required. For a contract or agreement to apply, there has to be an offer, acceptance, consideration, mutuality of obligation and competency. These factors determine the classification of the case mentioned.
In conclusion, I believe that Joan can be classified as an employee because she had a commission based on the amount Madrid and Berne made. Another reason is that Joan earned on a weekly basis, similar to any employee in a company. She also used office space in Madrid and Berne, and she also did corrections before submitting the work done to the clients. Joan only worked on the jobs the company provided, and this would make me classify her as an employee.
References
Allen, K. A. (2013). Employee or independent contractor. Professional Beauty, (Nov/Dec 2013), 138.
Kirby, R. (2003). Employee or Independent Contractor. LawNow, 28, 76.
