An individual, who holds an ICEC, is an independent contractor if he or she:
maintains a separate business with the individual’s own office, equipment, materials, and other facilities;
holds or has applied for a federal employer identification number or has filed business or self employment income tax returns with the federal Internal Revenue Service if the person has performed services in the previous year for which the individual is seeking the independent contractor exemption certificate;
operates under contracts to perform specific services for specific amounts of money and under which the individual controls the means of performing the services;
incurs the main expenses related to the service that the individual performs under contract;
is responsible for the satisfactory completion of services that the individual contracts to perform and is liable for a failure to complete the service;
receives compensation for service performed under a contract on a commission or per-job or competitive bid basis and not on any other basis;
may realize a profit or suffer a loss under cCoontracts to perform service;
has continuing or recurring business liabilities or obligations;
the success or failure of the individual’s business depends on the relationship of business receipts to expenditures.
In my part of the country, less than scrupulous construction contractors will hire illegal aliens, claiming them to be "independent" contractors (for whom no unemployment, socialist security, withholding tax, etc. is paid) allowing them to undercut contractors who play by the rules.
Make sure DAY LABOR SITES are brought up every time anything like this is proposed or enforced.
Just to keep things focused properly.
“Fees to apply for and renew an ICEC are nonrefundable.”
It’s a money grab. When it comes to politics.....
Follow the Money.
These types of laws have been around since 1935 when unemployment became a federal law. This law states basically that if an employer treats workers as independent contractors they need to verify two things -
1. That they have filed the certificate
2. That the relationship is one of a true contractor.
This law however doesn’t have one important ingredient - who makes the determination as to whether they meet the criteria or not.
Conservative folks aught to be conflicted about such a law.
On one hand we believe that everyone should pay their fair share. Those of us who do not own a business do not have a choice as to whether taxes will be deducted from our paychecks/retirement. They take it and we never see it again.
Therefore these “independent contractors” better have a legitimate business and be paying self employment tax or be reported as employees. Simple as that - you can’t be a little bit contractor anymore than you can be a little bit pregnant.
The tighter the economy gets the more employers risk fines/penalties by reclassifying their employees as independent contractors just to stay in business. They talk it up to their workers by saying they will pay them more per hour - which is true but at the end of the year the worker finds out that he actually was paid less than he earned before after taxes. Typically they don’t know they owe self employment tax and do not plan for it. They get fines and penalties for not paying estimated taxes and end up owing the IRS money.
However the other side of the issue Workers ask to be reclassified as independent contractors to avoid the IRS and other agencies from knowing that there is income until much later. The employer only reports payments > 600.00. Therefore if clever enough they get around paying child support, liens, back taxes and student loans.
The thing we are seeing more and more is that Illegal aliens get a Taxpayer ID for income tax purposes because they can’t work legally in the US but the IRS doesn’t care who pays income tax, with this number they get liability insurance, a Business name and start a business. They would even register with Minnesota.
They get around having to show that they are legally here to work and go on their merry way.
All in all - Unemployment is a Forced Insurance. Employers+