Example: A seller hires contractor to install product seller has sold. Is the contractor (actor) an independent contractor or employee of the seller (hirer)? Example: Owner of business hires drivers to deliver goods. Is the driver (actor) an independent contractor or employee of the business owner (hirer)?
The reason this is in establishing liability on the hirer of the culpable actor. If the actor is an employee, the hirer will be liable under various theories. Even if the actor is an independent contractor, the hirer may still be liable, but it is more problematic, and I suggest you gather facts with which to establish/argue the actor is an employee.
Several checklists exist to assist you in your arguments. One is grounded in the IRS regulations (used to assist the IRS in defining the hirer as an employee, so it can collect more taxes!). Another arises from various court cases.
1. Download and print items from hyperlinks at left, save in your forms file.
2. Read through the materials to increase your understanding of the checklist items.
3. In your investigation, both from the assured, who may have contracted with the hirer, as well as the actor and hirer, obtain the answers to as many of the checklist items as you can. The IRS as well as the court uses a numbers analysis; that is, if more than 50% of the checklist items can be answered yes, then the actor is an employee, even though paid by one check without deductions for social security, FICA, etc.SubroFlash