a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workersIf your company relies on at-home workers to perform some of your company's job responsibilities, you may be doing two things: You may be categorizing the cottage labor as independent contractors, and you may be paying them for "piece work," and not paying them for overtime or benefits, no matter how many hours they work.

If this is the case, and the federal labor board catches up with you, you could be in big trouble.

Somewhere around the mid-1990s a lot of U.S. companies got the idea that, if they reclassified their workers as independent contractors, they could avoid paying income and social security taxes, unemployment insurance, and a host of worker benefits, from health insurance to pension payments. Thousands of workers found themselves out of a stable job and in the position of being considered contract workers, suddenly responsible for paying their own income taxes and both their own and their former employers' share of social security and Medicare taxes. At this point the federal government cracked down, defined the difference between employee and contractor status very strictly, and set about enforcing the rules.

One of the biggest distinctions between an employee and a contract worker is whether a worker has any flexibility in performing his or her duties. If workers are expected to keep to a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workers

is is the case, and the federal labor board catches up with you, you could be in big trouble.

Somewhere around the mid-1990s a lot of U.S. companies got the idea that, if they reclassified their workers as independent contractors, they could avoid paying income and social security taxes, unemployment insurance, and a host of worker benefits, from health insurance to pension payments. Thousands of workers found themselves out of a stable job and in the position of being considered contract workers, suddenly responsible for paying their own income taxes and both their own and their former employers' share of social security and Medicare taxes. At this point the federal government cracked down, defined the difference between employee and contractor status very strictly, and set about enforcing the rules.

One of the biggest distinctions between an employee and a contract worker is whether a worker has any flexibility in performing his or her duties. If workers are expected to keep to a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workers

ker benefits, from health insurance to pension payments. Thousands of workers found themselves out of a stable job and in the position of being considered contract workers, suddenly responsible for paying their own income taxes and both their own and their former employers' share of social security and Medicare taxes. At this point the federal government cracked down, defined the difference between employee and contractor status very strictly, and set about enforcing the rules.

One of the biggest distinctions between an employee and a contract worker is whether a worker has any flexibility in performing his or her duties. If workers are expected to keep to a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workers

he federal government cracked down, defined the difference between employee and contractor status very strictly, and set about enforcing the rules.

One of the biggest distinctions between an employee and a contract worker is whether a worker has any flexibility in performing his or her duties. If workers are expected to keep to a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workers

a regular schedule at the discretion of the company, if they have to perform the work according to specific parameters, and if they cannot turn down work without negative consequences (for instance, being barred from additional work when available), then they are employees and need to be treated as such. Contract or freelance workers should have much more flexibility in their work arrangements, should be able to define what work they will and will not perform for the company involved, and should be able to accept or reject assignments, within reason, without being cut off from further work. The relationship between a contract worker and a company is more of a professional service provider / client relationship.

Another mistake commonly made by employers of at-home workers is not keeping track of the hours put in by cottage laborers, and taking that into account regarding compensation and benefits. The danger comes when an employer utilizes both in-house and at-home employees, and offers overtime and benefits to their in-house employees but not their cottage labor.

An example: A particular company employs about 30 in-house employees, paying them an hourly wage, paying their income, social security, and Medicare taxes, and offering health insurance, a 401K plan, vacation pay, and an Employee Assistance Program (EAP). The company also employs 30 at-home workers, offering them a combination of hourly wages and "piece work" wages, on a per-job basis. The at-home workers receive no overtime if they work over 40 hours in a week, no benefits, and may or may not have employee status. They don't know when or if they will receive work in the course