Do I have to track time for contractors?

Not legally for payroll (since they are paid by the job or invoice), but often practical for billing clients.

Can I require a contractor to work 9-5?

Setting specific hours is a strong indicator of an employment relationship, which could lead to misclassification risks.

Compliance

What is an Independent Contractor?

An independent contractor is a self-employed individual who provides services to a client. Unlike employees, they control how they do their work and are not subject to tax withholding or FLSA protections.

Employee vs. Contractor

1Behavioral Control: Does the company control how the worker does the job?
2Financial Control: Are business aspects controlled by the payer?
3Relationship: Is there a written contract or benefits?

Misclassification Risks

Misclassifying employees as contractors to avoid taxes is a major enforcement focus. Penalties include back taxes, unpaid overtime, and huge fines.

Tracking Contractor Hours

Even though they aren't employees, many businesses use ClockIt to track contractor hours for billing and project management purposes.

Get Started with ClockIt

Frequently Asked Questions

Do I have to track time for contractors?: Not legally for payroll (since they are paid by the job or invoice), but often practical for billing clients.
Can I require a contractor to work 9-5?: Setting specific hours is a strong indicator of an employment relationship, which could lead to misclassification risks.

Related Terms

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