Independent Contractor’s as Statutory Employees

        Employee or Independent Contractor?


Generally, independent contractors must be classified as employees if they fall within any of the following four categories and they meet the criteria for withholding Social Security and Medicare taxes:

     • Drivers who distribute beverages (other than milk), meat,
     vegetables, fruits or bakery products, or who pick up and deliver
     laundry or dry cleaning, and who are either employer agents or are paid on commission

     • Full-time life insurance sales agents whose principal business activity is selling life insurance, annuity contracts or both, primarily for one life insurance company

     • Individuals who work at home on materials or goods that are supplied and must be returned to an employer (or its designated entity) when the employer also provides the specifications for the work to be done

     • Full-time traveling or city salespersons who work on behalf of an employer and turn in orders to that employer from wholesalers, retailers, contractors or operators of hotels, restaurants and other similar establishments. The goods sold must be merchandise for resale or supplies for use in a buyer’s business operation. The work performed for the employer must be the salesperson’s principal business activity.