Employers must be wary of relevant employment laws, especially those concerning employment taxes and employment eligibility. Under the Immigration Reform and Control Act of 1986 and the Immigration Act of 1990, employers must hire only workers who are legally authorized to work in the United States. The law requires employers to file an I-9 form for new hires; an I-9 form is not needed for independent contractors.
An employer must file an I-9 form for all new employees hired after November 6, 1986. The form contains two main parts. The first part requires the new hire to fill out basic information, such as his name and address, and to check a box stating the reason he is eligible to work in the United States. The second section requires the employer to review and verify the employee’s information. For example, if the employee checks the “Citizen of the United States Box,” an employer could review and verify that by examining the employee’s U.S. passport or permanent resident card, among other things.
Form I-9 is not required in every instance. For example, an I-9 is not required for persons hired before November 7, 1986. Additionally, a person hired for domestic work on an irregular basis does not need an I-9 form. Independent contractors and people employed by an independent contractor do not need to file an I-9. An independent contractor sales agent, therefore, would not need to file an I-9. The employer must be sure that the person is not considered an employee, however, which can be a question of fact.
Independent Contractor vs. Employee
Whether a worker is an independent contractor or an employee can vary based on many factors. It is not enough to simply label a worker as an independent contractor in order to avoid obligations associated with his being an employee. The degree of control and decision-making abilities is often the determining factor. An independent contractor, for instance, typically has control over how to do the work. Independent contractors usually set their own hours and supply their own equipment and expertise. Employees, in contrast, tend to have limited control over the duties, are paid on a regular basis and receive benefits from the employer.
Whether you need to file an I-9 for your company's sales agent turns on whether the sales agent is a true independent contractor or not. You can incur further legal liability by trying to circumvent employment laws and rules. If you are unsure about the legal status of an independent contractor or your own obligations under relevant employment laws, seek independent legal advice.