Pub. 2018 Issue 1

8 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com I n some parts of the country, there’s been an increase of federal govern- ment scrutiny of the question whether certain dealership workers are or should be classified as independent contractors or employees. According to the Internal Revenue Service, “[t]he general rule is that an individual is an indepen- dent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” Thus, an individual is not an independent contractor if he/she performs services that can be controlled by the employer. Independent contractors’ earnings are subject to self-employment tax. By contrast, if an employer-employee relationship exists, the individual is not an independent contractor and his/her earn- ings generally are subject to FICA (Social Security tax andMedicare) and income tax COUNSELOR’SCORNER Classifying Some Dealership Work Employees v. Independent Contrac BY JULIE CARDOSI, LAW OFFICE OF JULIE A. CARDOSI, P.C.