Employers are vicariously liable for the negligent acts or omissions committed by their employees in the course and scope of their employment. By contract, as a general rule, employers are not liable for the acts of independent contractors unless the work is “inherently dangerous activity.”

Are church musicians employees or independent contractors?

In most cases, church musicians do not pass the test of being an independent contractor because of the control that the employer exercises over the musician’s work. In two Private Letter Rulings, the IRS has maintained that church organists and choir directors are employees, not independent contractors.

What are the legal ramifications of an employer misclassifying employees as independent contractors?

The consequences of misclassification can be grave. Besides owing back taxes to the feds, the business will also owe state unemployment taxes and unpaid worker’s compensation premiums, and may owe unpaid overtime or minimum wages, medical expenses and unpaid vacation and sick pay.

What’s the penalty for not paying a subcontractor?

The Two Percent Penalty. The two percent penalty against a contractor for violation of statutory requirements for paying subcontractors is recoverable by the subcontractor in a civil action or a disciplinary proceeding before the Contractors State License Board (CSLB).

Are there penalties for misclassifying employees as independent contractors?

The DOL, the IRS, state government agencies and courts construe independent contractor status narrowly and impose large penalties for misclassification.

What happens when a worker is a subcontractor?

worker is a subcontractor, he is responsible for keeping his or her own records and paying his or her own income and self-employment taxes. Therefore, it is very important to determine whether your worker is an employee or a subcontractor. 2. If the worker is a subcontractor, what forms do I complete and file to report his earnings?

Can a contractor be sued for failure to pay?

As noted in those two articles, relief is available depending on whether the contractor or subcontractor or material man adhered to the strict time limits of the various lien, stop notice and bond actions and, additionally, subject to the terms of the construction contract.