Answer

Differences between Independent Contractors and Employees

Categorising workers either as independent contractors or employees has significant implications upon the benefits as well as costs that they are entitled to and the type of relationship that the employer has with the worker, among other things. The categorization can be considered in terms of the agreement that is signed between an employer and worker. The federal government has the obligation of regulating the categorization of workers by assessing the impacts the categorization has upon workers and, most crucially on federal taxes (Leberstein & Ruckelshaus, 2016).). Using a case study of a contract between Joan Newman Business services and Madrid and Berne, a top-rated accounting company, this paper aims at looking at the differences between independent contractors and employees.

According to the case scenario, Madrid and Berne Company hired Joan Newman to offer extra services to their clients.  According to the contract that the two parties signed, Joan Newman was an independent contractor. Upon entering the contract, Joan solely worked on the jobs that Madrid and Berne assigned to her, receiving commissions for the same. The commission depended on the fees as were determined by Madrid and Berne along with the amounts paid to Madrid and Berne by clients. Joan used the unused and available space at Madrid and Berne’s offices and used Madrid and Berne’s supplies and equipment.  This arrangement did make it easier for clients to use Joan’s services as well as get familiar with Madrid and Berne’s offices. Madrid and Berne did review Joan’s work and if there were faults, the work was returned to Joan for corrections before the same were delivered to clients.

To determine Joan’s classification, principles that differentiate independent contractors and employees are reviewed. The rules that guide the classification of workers are: (i) whether there is control in the way a worker does their job; (ii) whether a worker has control over loss or profit issues when working for their company; (iii) the kind of contract signed (whether the employee works for a fixed number of hours or at recurring intervals); the level of training offered by a company; and (iii) the benefits received by a worker or company (DeRoss, 2017). Leberstein and Ruckelshaus (2016) reason that independent contractors are at liberty to work for whomever and whenever they chose, usually have their own workplace and tools/equipment to accomplish their jobs. A company’s right to terminate an independent contractor and/or when an independent contractor wants to quit are fundamentally spelt out in the contract that was signed between the contracting company and the independent contractor (Leberstein & Ruckelshaus, 2016). An employee has the opportunity of quitting their job at any time, yet the individual contractor is bound by the agreement that they signed (DeRoss, 2017). For more information about the difference between independent contractors and employees, see figure 1 below.

Figure 1: Independent contractor vs. employee (Leberstein & Ruckelshaus, 2016).

Using the above rules, there are things standing out that can help us categorise Joan as an employee or independent contractor. The bookkeeping service that was to be offered by Joan was an additional one to Madrid and Berne’s clients. According to the agreement that was signed by the two, Joan was Madrid and Berne’s independent contractor. Similarly, Madrid and Berne hired Joan on strict terms of reference. Joan used the space that was available in Madrid and Berne’s offices and used their supplies as well even as Joan helped Madrid and Berne’s clients. By understanding that they were distinct entities, the businesses entered into an agreement, with the contract spelling out that Joan was independent contractor. According to DeRoss (2017), the two companies followed the IRS principles by putting their agreement in writing to assist in identifying if a company is an employee or independent contractor. Thus, I strongly believe that Joan is an independent contractor of Madrid and Berne Company.

From a Christian worldview perspective, there are ethical dilemmas that arise. To Madrid and Berne, the ethical dilemma is that they are at liberty to choose a commission that is unequal to the expectation of the industry. That is, they had the opportunity of choosing between a lower or decent commission for Joan’s work. To tackle this ethical issue, there is a need for the contract agreement to be concluded, which entails acceptance and offer of a contract. Joan can choose to accept the contract if she thinks that it is equal and fair. From the Christian perspective the metaphor of Joseph’s successful handling of the food crisis in Egypt can be related with this scenario. 

Joan’s ethical dilemma lies in the fact that she can opt to work for Madrid and Berne or directly contact Madrid and Berne’s customers after working hours for Madrid and Berne at low costs. The strategy to tackle this is that Joan should state specifically that she will not work with Madrid and Berne’s clients during working hours in agreement terms. In the Bible’s Old Testament, God created animals, light, and the earth and all that is it. All these items are, thus, to be reasonably and equally used by people. God’s principle is the ethical standard for Eve and Adam. It is the ethical principle that Joan ought to follow the guidelines by Madrid and Berne in the same way.