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Who are employees ?

Many employers classify workers as independent contractors to avoid:

Persons classed as independent contractors have sued employers seeking employee benefits. E.g., Microsoft settled a class-action filed on behalf of thousands of contingent workers for around $100 million.

Who are employees ?

See IRS web site on information for businesses with employees and who is an employee new 10/10/07

Withholding of tax on payments to foreign athletes and entertainers may be required. new 9/24/08

Under § 530(a) of the Revenue Act of 1978, as amended, unless there is NOT a reasonable basis, "employers" can treat persons as NOT an employee under certain circumstances.

Rev. Rule. 87-41, 1987 CB 296 – "Guidelines for classification as employees or independent contractors" – COMMON LAW RULES generally determine if the employer/employee relationship exists [Guides for determining that status are found in the following three substantially similar sections of the Employment Tax Regulations: § 31.3121(d)-l(c); § 31.3306(I)-1; and § 31.3401(c)-l.]