Iowa Administrative Code › Agency 871 - Workforce Development Department › Chapter 23 - Employer's Contribution and Charges › Rule 871-23.19 - Employer-employee and Independent Contractor Relationship

Current through Register Vol. 47, No. 3, July 24, 2024
(1) The relationship of employer and employee
			 exists when the person for whom services are performed has the right to control
			 and direct the individual who performs the services, not only as to the result to
			 be accomplished by the work but also as to the details and means by which that
			 result is accomplished. An employee is subject to the will and control of the
			 employer not only as to what shall be done but how it shall be done. It is not
			 necessary that the employer actually direct or control the manner in which the
			 services are performed; it is sufficient if the employer has the right to do so.
			 The right to discharge or terminate a relationship is also an important factor
			 indicating that the person possessing that right is an employer. Where such
			 discharge or termination will constitute a breach of contract and the discharging
			 person may be liable for damages, the circumstances indicate a relationship of
			 independent contractor. Other factors characteristic of an employer, but not
			 necessarily present in every case, are the furnishing of tools, equipment,
			 material and a place to work to the individual who performs the services. In
			 general, if an individual is subject to the control or direction of another
			 merely as to the result to be accomplished by the work and not as to the means
			 and methods for accomplishing the result, that individual is an independent
			 contractor. An individual performing services as an independent contractor is not
			 as to such services an employee under the usual common law rules. Individuals
			 such as physicians, lawyers, dentists, veterinarians, construction contractors,
			 public stenographers, and auctioneers, engaged in the pursuit of an independent
			 trade, occupation, business or profession, in which they offer services to the
			 public, are independent contractors and not employees. Professional employees who
			 perform services for another individual or legal entity are covered
			 employees.
(2) The nature of the
			 contract undertaken by one for the performance of a certain type, kind, or piece
			 of work at a fixed price is a factor to be considered in determining the status
			 of an independent contractor. In general, employees perform the work continuously
			 and primarily their labor is purchased, whereas the independent contractor
			 undertakes the performance of a specific job. Independent contractors follow a
			 distinct trade, occupation, business, or profession in which they offer their
			 services to the public to be performed without the control of those seeking the
			 benefit of their training or experience.
(3) Independent contractors can make a profit
			 or loss. They are more likely to have unreimbursed expenses than employees and to
			 have fixed, ongoing costs regardless of whether work is currently being
			 performed. Independent contractors often have significant investment in real or
			 personal property that they use in performing services for someone
			 else.
(4) Employees are usually paid
			 a fixed wage computed on a weekly or hourly basis while an independent contractor
			 is usually paid one sum for the entire work, whether it be paid in the form of a
			 lump sum or installments. The employer-employee relationship may exist regardless
			 of the form, measurement, designation or manner of remuneration.
(5) The right to employ assistants with the
			 exclusive right to supervise their activity and completely delegate the work is
			 an indication of an independent contractor relationship.
(6) Services performed by an individual for
			 remuneration are presumed to be employment unless and until it is shown to the
			 satisfaction of the department that the individual is in fact an independent
			 contractor. Whether the relationship of employer and employee exists under the
			 usual common law rules will be determined upon an examination of the particular
			 facts of each case.
(7) If the
			 relationship of employer and employee exists, the designation or description of
			 the relationship by the parties as anything other than that of employer and
			 employee is immaterial. Thus, if such relationship exists, it is of no
			 consequence that the employee is designated as a partner, coadventurer, agent,
			 independent contractor, or the like.
(8) All classes or grades of employees are
			 included within the relationship of employer and employee. For example,
			 superintendents, managers and other supervisory personnel are
			 employees.