Independent Contractors vs. Employees

Federal law is very clear on when you may classify workers as independent contractors instead of employees. Note the "Services Provided as Key Activity of the Business" clause:

If a worker provides services that are a key aspect of the business, it is more likely that the business will have the right to direct and control his or her activities. For example, if a law firm hires an attorney, it is likely that it will present the attorney's work as its own and would have the right to control or direct that work. This would indicate an employer-employee relationship.

Thus, any dental facility hiring a dental hygienist, a dental assistant, or an administrative worker must treat that person as an employee from day one. This means complying with all laws and regulations that apply to an employer/employee relationship including all payroll taxes and withholdings. There is no "Under $600 Exemption" as that only applies to valid independent contractors.

When you use RDH Temps, Inc., all temps are employees of RDH Temps. As their employer, we handle their payroll and their payroll taxes. We comply with all employment laws and regulations including the Massachusetts Universal Health Care Law.

Paying Temps Directly
If you pay a temp directly, either as an "Independent Contractor" or "Under the Table", you are in violation of employment law. Beware of agencies who ask you to pay temps directly as independent contractors - it is not legal despite what they may tell you. If the Internal Revenue Service does not get the appropriate taxes from the temp, they will come to you:

Consequences of Treating an Employee as an Independent Contractor
If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker

Misclassified Workers Can File Social Security Tax Form
Workers who believe they have been improperly classified as independent contractors by an employer can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report the employee's share of uncollected Social Security and Medicare taxes due on their compensation.

In addition, civil and criminal penalties may apply. Penalties up to $25,000 and one year imprisonment for a first offense, and $50,000 and up to two years imprisonment for a second offense can be imposed.

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