{br} STUCK with your assignment? {br} When is it due? {br} Get FREE assistance. Page Title: {title}{br} Page URL: {url}
UK: +44 748 007-0908, USA: +1 917 810-5386 [email protected]
  1. Employee vs. Independent Contractor



    Madrid and Berne is a top-rated accounting firm with offices in Phoenix and Tucson. Madrid and Berne wanted to provide bookkeeping as an additional service to its clients. It hired Joan Newman Business Services, with offices in Phoenix, Flagstaff, Tucson, and Yuma, to perform contract bookkeeping services for Madrid and Berne clients who requested and needed such services. Madrid and Berne entered into an independent contractor agreement with Joan Newman Business Services. The contract stated that Joan Newman is an independent contractor and agrees that her business is an independent contractor of Madrid and Berne.
    After entering into the agreement, Joan worked solely on jobs assigned by Madrid and Berne and was paid a commission for the work. The commission was based upon the fees determined by Madrid and Berne and paid by the clients to Madrid and Berne. Joan was paid on a weekly basis. She used available and unused office space at Madrid and Berne, along with Madrid and Berne’s equipment and supplies. This arrangement made it easier for clients to utilize Joan’s services and be familiar with the offices. Madrid and Berne reviewed Joan’s work and returned faulty work to her for corrections before delivering the completed work to the clients.
    In a 500-750 word paper, apply what you have learned about the distinctions between employees and independent contractors to the scenario by discussing the following.
    Provide an explanation of why it is important to know the distinctions between employees and independent contractors when operating a business.
    Discuss the key factors for determining Joan’s employee classification using the concepts that have been presented so far in the course and your own research relevant to the scenario.




Subject Business Pages 4 Style APA


Classifying Workers as Employee vs. Independent Contractor

Employment laws, according to Englebrecht and Dowis (2018), are established to spell out the association between an employee and worker. The relationship, rules, and benefits offered are often reviewed and agreed on from both sides during contract negotiation before work is started. There are two categories of workers: an independent contractor and employeeand business laws establish and exposes the distinction between the two. When operating a business, it is crucial to understand the difference between independent contractors and employees since, according to Tran (2016), liability of the principal torts are regarded differently in the two situations. For example, in an employee’s case, the employer has obligation for their physical torts, while in the independent contractor’s case, the contractee has no liability for their physical torts (Andoyan, 2017). Since the law undergoes continuous modifications, t is crucial for employers and businesses to have proper systems of categorization that have policies for managing and hiring independent contractors and/or employees because one may welcome lawful punishments if they wrongly classify their workers (Englebrecht & Dowis, 2018). Using a case study in which the agent’s employment categorization is to be determined and justified, this paper aims at discussing the various factors employed in distinguishing independent contractors and employees.

There is a set of differences between an employee and an independent contractor.  First, employees are individuals who are hired to carry out some jobs (Englebrecht & Dowis, 2018). Employees undergo recruitment processes before they are selected for particular jobs. Conversely, independent contractors are individuals who provide services to another non-employee (Andoyan, 2017). Independent contractors include, dentists, doctors, veterinarians, and lawyers. An employee is supervised by the employed to determine whether the work that was assigned has been done accordingly or not (Tran, 2016). The agent works fulltime for the principal agreed and receives a salary and not a fixed pre-agreed amount (Andoyan, 2017). An employer controls much of what is done by an employee, while independent contractors sign contracts which comprise of delivering services or products initially agreed on (Englebrecht & Dowis, 2018). An employee, according to Andoyan (2017), is paid a fixed amount of salary, while independent contractors are paid in accordance with contract signed. Therefore, kKnowing the difference between an employee and independent contractor is helpful in determining whether an employer has to hold back taxes or subject one to self-employment tax.

After reading, reviewing, and analyzing the case provided, the crucial factors that determine whether Joan is an employee or independent contractor is the fact that Joan works on jobs that are assigned to her and gets paid a commission for the work she does, payments which are determined from fees paid by clients. She receives her payment weekly and uses Berne and Madrid’s unused office space. Evidently, Joan works on contractual basis and paid on weekly basis, making her be classified as an independent contractor. To support this, Joan has not received any benefits as would be the case of an employee. Tran (2016) states that general principles is that a person is an independent contractor if the employer/payer has the right to control or direct the outcome of the work, not what will be executed and how it will carried out. While there is no mention of whether Joan’s payment is subjected self-employment tax, as is the case for independent contractors, the fact that she is paid for work done weekly and not a guaranteed salary or wage, Joan fits the classification of an independent contractor. Thus, Joan is an independent contractor.




Andoyan, A. (2017). Independent Contractor or Employee: I’m Uber Confused! Why California Should Create an Exception for Uber Drivers and the “On-Demand Economy ”. Golden Gate U. L. Rev. 47(2), 153-173. http://digitalcommons.law.ggu.edu/ggulrev/vol47/iss2/9

Englebrecht, T. D. & Dowis, W. B. (2018). An Empirical Assessment of Employee vs Independent Contractor Status in Taxation and the Effects of Judges’ Gender, Political Affiliation, and Industry on Those Decisions. Advances in Accounting Behavioral Research (Advances in Accounting Behavioural Research, 21, 21-45. https://doi.org/10.1108/S1475-148820180000021002

Tran, T. (2016). The Misclassification of Employees and California’s Latest Confusion Regarding Who is an Employee or an Independent Contractor, Santa Clara Law Review, 56(3), 678-702. http://digitalcommons.law.scu.edu/lawreview/vol56/iss3/5




Related Samples

WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, how can I help?