Worker Status

Employers must make two distinctions when classifying workers. A worker can be an employee or an independent contractor. Employees can be exempt or non exempt.

First, you need to determine who is an employee and who is not. Every worker is not necessarily an employee. Is the part-time secretary in marketing an employee? How would you classify the free-lance artist who has handled all your firm's graphics for the last five years (and regularly attends the holiday party)? What is the status of a 16-year-old summer worker in shipping or a commission-only salesperson? These questions aren't academic. The answers determine whether the company must withhold taxes and pay overtime.