Mary and Celia open a boutique, they hire independent contractors. When they are not selling Mary and Celia want the I.C's to do inventory and clean up the boutique. Mary and Celia also set the working hourse.. does these factors affect theri status as independent contractors? If so can they still pay them only on commision for sales?
Yes, these factors can potentially affect the status of the independent contractors. To determine if someone is classified as an independent contractor or an employee, there are several factors that are considered. These factors generally revolve around the level of control the business owner has over the worker. Let's break down the two factors you mentioned:
1. Direction and Control: By instructing the independent contractors on when and how to do inventory and clean up the boutique, Mary and Celia may be exerting a significant level of control over the workers. Independent contractors are generally expected to have autonomy and control over their work, including deciding when and how to complete tasks.
2. Working Hours: When Mary and Celia set specific working hours for the independent contractors, it suggests a level of control over their schedules. Independent contractors typically have the freedom to determine their own working hours.
Considering these factors, it's possible that Mary and Celia's independent contractors could be classified as employees rather than independent contractors. This classification would make them entitled to certain benefits and protections under employment laws.
Regarding the payment of commissions, it is still possible to pay independent contractors on a commission basis. However, it is important to ensure that the overall working relationship and control factors align with an independent contractor classification. Simply paying someone on commission does not automatically make them an independent contractor if the other factors indicate an employer-employee relationship.
To determine the proper classification of workers and ensure compliance with labor laws, it's always wise to consult with a legal professional or employment expert who can assess the specific details of the working arrangement.