The amounts involved are significant. It also has to pay an equal amount for the employer's share. Despite the high stakes, classifying a worker as either an independent contractor or an employee is not straightforward. The determination depends on a number of factors and can be quite complex. Control of how and when the worker gets the job done may or may not be the most important factor.
Some workers are employees no matter how little or how much they are supervised.
Others are independent contractors no matter how tightly a business controls them. For some, the IRS uses a 20-factor control test as an analytical tool. There is some good news in all this intricacy. First, taxes due may be reduced if the misclassification is unintentional. Second, in some cases, if you have always treated workers as independent contractors the IRS may let you go on doing so.