The contractor vs employee issue is a LEGAL issue and one all VAs need to be aware of. Too many VAs are misclassified by “clients” who are actually employers who don’t want to pay benefits.
The problem for some VAs is that they get into long-term relationships with their clients and the relationship changes from independent contractor to employee.
For example, a VA / client relationship starts out independent, then as time goes on it evolves into an employee / employer relationship. This actually happened to me when I first went into business for myself: I had a client whose business grew rapidly and it wasn’t long before the work I was doing was more appropriate for an employee rather than a VA.
If you are unsure what the business relationship you have with a client is, review this checklist the IRS uses to audit for independent contractors:
1. Telling how, when, or where to do work.
2. Telling what tools or equipment to use.
3. Telling what assistants to hire to help with the work.
4. Evaluation systems of independent contractors.
5. Telling where to purchase supplies and services.
6. Requiring training by company and requiring certain procedures and methods to be used on the jobs.
7. Significant investment on the part of the independent contractor.
8. Not reimbursed for business expenses by employer.
9. Independent contractor must prove profit or loss.
10. Provide benefits insurance, pension or paid leave.
11. Written contracts for contractors, permanency of the relationship, and services provided as key activity to the business.
