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The differentiation between an independent contractor and an employee is a critical one for any employer to make. Furthermore, this choice can have significant implications for the business regarding additional fees and taxes. In this situation, Karen was initially hired as a temporary employee. Moreover, Karen has functioned as an independent contractor for 5 years. If one were to look at her employment status, they would see that Karen has additional clients outside of the local utility as well as the fact that she has not received benefits or proper tax documentation for this period time. For these reasons, Karen should be classified as an independent contractor for the local utility.
Does the fact that Karen has clients outside the local utility and doesn't receive benefits mean that she is not "legally" defined as an employee. What would a court consider in making this determination? What would the IRS consider?
Anheier observes that the interactions between the three primary sources of funding, as well as the sub-sources within those,
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