STATUTORY EMPLOYEES AND NONEMPLOYEES
Some laws classify workers as employees or independent contractors regardless of the employer’s right of control or lack of control over the manner in which the work is done.
For payroll tax purposes, the Internal Revenue Code classifies the following four categories of individuals as statutory employees even though they could be independent contractors under the common-law test:
• a delivery driver (other than one who delivers milk) • a full-time life insurance agent • an individual who works at home on materials or goods supplied by the employer
• a full-time salesperson who sells merchandise for resale or for use in the buyer’s business operation
The Internal Revenue Code classifies the following individuals as statutory nonemployees for all federal tax purposes:
• direct sellers of consumer products in the home or a place of business other than a permanent retail establishment
• licensed real estate agents • companion sitters who are not employed by a companion sitter placement service
Workers’ compensation statutes, unemployment insurance statutes, and other laws also state who does or does not qualify as an employee for purposes of the statute.
