Mini-Series Topic #10: Classification of Workers

This month we focus on some in area that is poorly understood by many private trainers.  It is important to note that if you own your own training business you must understand that improper classification of a worker as an independent contractor to avoid the responsibility of employment taxes is an offense that can have serious consequences.

Area #1: Classification of Employees

All too often private trainers who hire assistance pay their assistants off the books.  Some even write checks out of their personal accounts.  This is to be discouraged.  Though it is widely understood that independent contractors are not entitled to unemployment benefits should they be laid off, what is not appreciated is that an independent contractor who believes that they have been misclassified may indeed apply for benefits.  In such cases, the IRS will gather information and apply their 20 factor test.  In cases where it is found that the working arrangements meets the standard for an employer-employee relationship, the employee will be entitled to benefits, and the employer can face stiff fines.  All trainers who employ staff either FT, PT or per diem are encouraged to become acquainted with the 20 factor test.

The 20 factors that the IRS considers are as follows:

  1. Is there any financial risk(other than not getting paid) for the employee?
  2. Does the worker have a personal investment in equipment and/or facilities owned by the business?
  3. Does the worker derive all income from your business, or do they contract for multiple businesses?
  4. Does the worker market their services to the general public, or get all their clients directly through your business?
  5. Does the business dictate work hours and location?
  6. Does your business provide training (Orientation and professional development) or does the worker arrive with all the skills presumed necessary for the job?
  7. Are the workers services critical for your business and under your control?
  8. Does the worker perform the services personally, or do they have the option of delegating tasks to another person?
  9. Does the worker hire and pay assistants to perform job duties?
  10. Is there an ongoing relationship(such as teaching a class for three hours every week) or is work only sporadic (such as tax preparation once a year)?
  11. Is the worker able to flex their hours, or do you control their schedule?
  12. Is the worker required to report to a specific location to perform their duties?
  13. Does the worker spend full time working on tasks for your business?
  14. Does work have to be performed by an established protocol or sequence, or does the worker have the right to determine how the job will be done?
  15. Is the worker required to provide reports or follow-up to a business supervisor?
  16. Do you reimburse the worker for business or travel costs?
  17. Does the worker use company owned equipment to perform their tasks?
  18. Do you plan to pay the worker by the job, or by the hour/ week / month?
  19. Do you reserve the right to fire a worker if they are not performing satisfactorily?
  20. Does the worker have the right to quit at any time, or are they under contract to complete a particular task?
Factors to be considered when establishing procedure:
  1. All 20 factors do not have to be met in order for the worker to be considered an employee.
  2. When in doubt, contact the IRS for a ruling.
  3. As a general rule, instructors hired to teach a class at your facility, using your approved practices and equipment and who are subject to your business P and P should always be classified as employees.
  4. Assign responsibility for final decision making to the person in charge of HR.
  5. In cases where you will classify the worker as an independent contractor, we suggest that you obtain the IRS checklist, chick off those factors that do and do not apply and include this in the personnel file for the worker.  This should be saved as documentation in the event that questions are ever raised.

Penalties – worst case scenario,the employer may be held responsible for payment of both employer and employee share of back taxes.  In addition, the IRS may elect to impose fines and penalties per misclassified employee as well, and the amounts may vary from state to state.  Trainers are advised to consult with a legal professional in your area to understand local rules and how they apply to you.

Visit the IRS Website to learn more.

Classroom News

Advanced Class – our advanced class is making exceptional progress. The class has been working on pre-public access skills, including teaching the dogs to go “under” and maintain a stay when in public areas such as restaurants and public transit.  The dogs are also working on set up tasks such as “tug” that serve as the foundation for other tasks such as wheelchair pulling.

Now Accepting Applications

We are accepting applications from individuals in need of a service dog to assist with their needs.  We will accept applications from those who wish to train their own dog as well as those who will need to receive a program trained dog.  If you are seeking to train with your own dog please be aware that the following rules apply:

Breed Restrictions – due to insurance restrictions we are unable to accept Pit Bulls, Dobermans, Rottweilers or Staffordshire Terriers.

Age Restrictions – dogs must be less than  a year old at the time of acceptance.  The reason for this is that training lasts 18 months, and is very costly.  Though we do not pass that cost on to military veterans and first responders, the costs to us are real.  We need to ensure maximum working life for the team.

Weight Requirements – the dog must be expected to attain a minimum adult weight of 50 lbs.  There are numerous case reports of small dogs stepped on at crowded public venues.  We also require all dogs to have FOUR on the FLOOR, meaning that they must walk beside their handler and not be carried.

Temperament Testing – in order to ensure public safety we require that all dogs be temperament tested prior to a decision to accept into our training program.  A SD must be bright and eager to learn, be even-tempered and absent evidence of any fear or aggression towards public places, stranger or other dogs.

Our experienced training staff is available to help you focus your search to locate the ideal dog for you.

Seeking Student Trainers

Are you a local student age 13 or older who is seeking a high level public service experience?  Training a SD for a local resident in need is rewarding, and also a great way to help polish up your future application to a competitive college.

Are you an adult looking to learn to train SD’s, or a retired person who seeks a way to remain connected to your community?  This is an ideal way for you to connect while learning a new set of skills.

Contact our facility to learn more at:  602-870-2008

Wellness Tip

In late June we received word that the FDA was investigating possible links between grain-free diets and the development of a serious heart condition in dogs known as dilated cardiomyopathy (DCM).  To be specific, included in this alert were those foods that contain legumes such as peas, lentils, other legume seeds and potatoes.  This alert came after the FDA identified an increased number of cases of DCM in breeds typically not prone to this problem, and in cases where the dogs had been fed grain-free diets for a period of months to years.

Brands that advertise “grain-free” diets have become popular.  We recommend that you speak with your veterinarian to determine whether or not your feed is among the brands that have been flagged as a concern.

Thank You

We wish to express our appreciation to the following individuals who have supported our program over the past month:

  • Valerie Schluter
  • DAV Auxiliary Unit 1
  • Leo Buffa

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