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I just happen to be reading this article, and as an independent business owner it upsets me how the media paints business owners who have independent contractors as "misclassifying" their employees.

How is misclassification determined in Texas? The article seems to suggest any business owner who has a 1099 contractor who happens to owe child support is misclassifying them. It wreaks of if you are not with us in collecting child support, then you are against us type of tone.

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How is misclassification determined in Texas?

This is a complicated distinction virtually anywhere in the world. For example, in I have workers who are contractors for income tax and GST (value added tax) but employees for superannuation and worker’s compensation. Similar nuances apply in - a worker might be an employee for some purposes and a contractor for others.

For Texas law only (Federal law and inter-state employees are different) the law is that a worker is presumed to be an employee unless the employer demonstrates that they are an independent contractor. To be an independent contractor:

  1. The company generally seeks out the worker

  2. The company and worker negotiate the terms of the engagement

  3. The company does not train the independent contractor

  4. Payment is for a finished product or service, not hourly wages

  5. The independent contractor does not sign a non-compete agreement

  6. Any non-solicitation agreement must be narrowly defined

  7. Any non-disclosure agreement must be narrowly defined

  8. The worker does not wear the company uniform

  9. The worker does not have a company e-mail account

  10. The worker has no company benefits or wage advances

  11. The company does not withhold taxes and issues an annual 1099

  12. The worker has his own business cards

  13. The worker invoices the company on his own letterhead

  14. The worker provides goods or services to other companies

  15. The worker is self-employed and is in a position to make a profit or loss

That said, the article is clear that for child support garnishment it shouldn’t matter if the worker is an employee or a contractor.

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    I presume those points (and their inverse) are all persuasive rather than determinative? I've known plenty of IT contractors who get company email accounts and are paid by the hour (not in Texas though). – Martin Bonner supports Monica Nov 18 '19 at 6:38
  • @MartinBonnersupportsMonica and when push comes to shove those “contractors” are probably employees. Generally, push doesn’t come to shove - if neither the employer nor the worker rock the boat, no one cares. – Dale M♦ Nov 18 '19 at 11:58
  • @DaleM, the shouldn't matter is a problem if that is not a law or if the law is silent. Of course, I do believe an independent contractor should arrange his own payments just like they arrange their own payment of taxes. I mean it sounds like where the law is silent, sentiment prevails, not good. There should be a law on the books that says, if you are 1099, then its up to you to make payments. I mean it should go without saying but not when spin doctors in the media are involved, then it should be explicit because this article seems to implicate a company as being part of the problem. – Daniel Nov 18 '19 at 14:33
  • @DaleM, you see at the end of the day, we should not pretend that government does not want to remove any and all barriers to some form of taxation. For example, Uber just got hit with a $650M bill from New Jersey for employment tax evasion. I mean they should have been forewarned and given a list similar to yours and the opportunity to prove the drivers are indeed independent contractors. – Daniel Nov 18 '19 at 14:36
  • @Daniel businesses are forewarned - the statutes and the case law is all available and the onus is on the business to comply. If they don’t know they are required to educate themselves - lawyers and accountants are available and the government has a big internet presence. It’s not very hard - a worker is an employee unless they clearly aren’t. – Dale M♦ Nov 18 '19 at 19:08

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