Employees can be re-hired as independent contractors but it is not enough to have a contract which describes the worker as one or the other. If an employee was re-hired as a contractor under an Independent Contractor Agreement but none of their actual working conditions changed, in the event of a dispute, it’s unlikely that the Employment Appeals Tribunal would agree the worker was in fact a contractor. It’s important to maintain the distinction between employees and independent contractors. Companies must classify workers correctly. Keeping track of who is an employee and who is a contractor ensures a business is in a position to file taxes properly and comply with employment law and revenue law. Employers must collect PRSI and PAYE on behalf of their employees. Self employed persons are responsible for their own PRSI contributions and income tax payments. The consequences for misclassifications can range in severity depending on whether or not the misclassification is intentional, unintentional, or fraudulent.