Are you really just an Offsite Employee?

"Home Workers are Statutory Employees if..."

This article appeared in the employer newsletter issued by California's EDD. Given that the 'common law factors' make it difficult to guarantee (especially to a tax auditor) that you're an independent contractor, it's worth asking yourself whether you could be a statutory employee of your client under these rules.

Employers are reminded that certain types of workers performing services off the employer's premises may be statutory employees under the "home worker" provisions contained in Section 621(c) of the California Unemployment Insurance Code.

Wages paid to home workers are subject to Employment Training Tax, Unemployment Insurance, and State Disability Insurance if ALL of the following conditions exist:

• The work is required to be returned to the employer or another designated person.
• The work is done according to specifications furnished by the employer on materials or goods supplied by the employer.
• The home worker performs services as part of a continuing relationship with the employer rather than as a single transaction.
• The home worker does not have a substantial investment in facilities of his/her own, other than transportation.
• Substantially all the work is done personally by the home worker.
• Withholding of California Personal Income Tax is not mandatory on home workers if they are independent contractors under the usual common law factors.

Some common types of services performed by home workers are sewing, art work, crafts, photograph retouching, drafting, assembling, bookkeeping, proofreading, editing, typing and transcribing medical records, board meeting notes, letters, and correspondence.

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