Legal environment of business chapter 27 agency

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Legal Environment of Business, Chapter 27 – Agency Relationships - Andrea Smith JD 6
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I. Agency Relationships (Cont’d) 2. In an Independent Contractor situation: Hiring Entity does not pay SS/UIC Hiring Entity typically not responsible for torts of Independent Contractor Ind. Contractor Controls own work Ind. Contractor Retains compensation for work Ind. Contractor owns Copyright (unless contract states otherwise) Legal Environment of Business, Chapter 27 – Agency Relationships - Andrea Smith JD 7
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I. Agency Relationships (Cont’d) Criteria Used by the Courts to Determine Employee Status 1. How much control can the employer exercise over the details of the work? 2. Is the worker engaged in an occupation or business distinct from that of the employer? 3. Is the work usually done under the employer’s direction or by a specialist without supervision? 4. Does the employer supply the tools at the place of work? 5. For how long is the person employed? 6. What is the method of payment—by time period or at the completion of the job? 7. What degree of skill is required of the worker? Legal Environment of Business, Chapter 27 – Agency Relationships - Andrea Smith JD 8
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I. Agency Relationships (Cont’d) Criteria Used by the IRS to Determine Employee Status . Just because a business calls a worker an “Independent Contractor” doesn’t mean IRS will accept that classification. 1. Look to the degree of control the business has over the worker. 2. IRS closely monitors this, as it wants proper collection of SS, withholding, and UIC 3. Penalties for misclassification Criteria used by Job Service to determine Employee Status . Legal Environment of Business, Chapter 27 – Agency Relationships - Andrea Smith JD 9
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Example: (no audio on this slide…think about these scenarios) You are the Owner of a Newspaper : Need a photographer What are the advantages to hiring an Employee? What are the advantages to hiring an Ind. Contractor? You are the Photographer : What are the advantages of being an Employee?
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  • Spring '17
  • Yong Shin Park
  • Business Law, agency relationships, Andrea Smith

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