IC In Laws | Ins and outs
In this article you will read about:
- What is IC In Laws?
- Difference between independent contractors and self employed.
- Laws for independent contractors
- Rights to independent contractors
Table of Contents
Both employees and employers have received many benefits from the rise of the gig economy. But there are also occupational hazards and benefits, such as mislabelling of workers. So it is essential to know the IC compliance, also called the independent Contractor’s compliance.
The difference between an employed staff and a self-reliant contractor may not be noticeable when it is related to duty performance that leads to the organization suffering from heavy fines when they get caught.To save money, some organizations intentionally mislabel their workers to save money. When caught, the organization will face the wrath of the law whether they did it intentionally or unintentionally. So this makes it very important to understand IC compliance.
What is IC Compliance?
The meaning of IC compliance is Independent Contractors Compliance. This term broadly classified Freelancers, Contractors, and every type of worker under the Gig economy. A set of guidelines, ordinances, policies, and regulations is self-reliant contractors. It protects the interests of the independent contractors rights and must be followed by every organization in a given state or region.
These independent contractors laws exist as the laws that govern the traditional employees are different, and their benefits are not the same. So these regulations must be followed by any organization that engages the services of these independent contractors, freelancers, entrepreneurs, and consultants. If they don’t, then they will get penalized by the authorities. Individual works is determined by their ability to work. These abilities vary by state, including California, which passed AB5, making it much more challenging to appoint workers as independent contractors.
Independent Contractor vs self-employed
According to the definition, an individual who works for someone else as a non-employee is a contractor. It is one of the ways of being self-employed. The Contractor can be self-employed, but a person might not be an independent contractor. Here are simple examples to understand the differences between two terms :
- Self-employed:- If your neighbor’s kitchen tap is faulty and you are contacted through your business website to fix it. After completing your job, you send them an invoice for your payment. In this case you are self-employed. SIMPLE!
- Independent Contractor:- Suppose you have signed a contract to perform all the plumbing work for your friend’s building company. Each month the company will pay you according to the hours you have worked and get paid for your work directly into your business account. Now you are an independent contractor that provides services by signing a contract.
Laws For Independent Contractors
Independent Contractors Rights
Right to how you work.
How you work cannot be controlled by your client. It is your choice to decide your job unless otherwise mentioned in your contract. You have a choice if you want to work 3 days a week from a rented office located on the beach in Mexico or have regular business hours from the home office.
Right to Contract.
For establishing a consultant-client relationship, a contract is an essential legal component. Before starting work, you should make sure that a contract is signed.
Manage your Business .
It is essential to understand that for managing your own business as an independent. For getting any benefit from the company, independent contractors are not eligible.
Work from Anywhere.
It is a big plus of being an independent contractor when you have the liberty to work from anywhere you want. Many people work from a home office because of this. But others can take it as a digital nomad working remotely across countries and continents.
Right to Where you work.It is a big plus of being an independent contractor when you have the liberty to work from anywhere you want. Many people work from a home office because of this. But others can take it as a digital nomad working remotely across countries and continents.
Right to provide your expertise.You have the right to show your expertise in your chosen field of work. So, by and large, the client should not provide guidance or training.
Right to Market Your Services.You have the right to market your services as a self-reliant contractor to other businesses. You have the freedom to work with multiple clients at once.
Right to When you Work.The answer to the question “Can you tell an independent contractor when to work?” is NO. Many people ask this. Unless specified in your contract, you are free to work from wherever you want as an independent.
Right to work with other Independent Contractors.You can engage the subcontractors or partners with other independents to complete projects or specific tasks.
Right to get paid for your work.Being an independent contractor, you will mainly submit invoices for work completed. During the initial contract negotiations, pay, and payment terms should be discussed.
Right to your Tax Responsibilities.The clients should not withhold taxes from their payments. You, known as self-employment taxes, should pay the taxes. Self-employment taxes include both the taxes of employer and employee halves of Social Security and Medicare (FICA).