Are you an employee or a contractor? This isn’t simply a matter of what you call yourself, or how you think about your relationship to those who pay you to perform services. Because formal employment is the subject of so many local, state, and federal rules, its definition is spelled out in law — and penalties for violating it can be severe.
In my role as a foundation president, I serve on many nonprofit boards. Some years ago I joined the board of an organization that had improperly classified its personnel as independent contractors rather than employees. Whatever the motive may have been, this error created major tax liabilities that threatened to capsize the small nonprofit. Fortunately we were able to work things out with the relevant agencies, but it was a close-run thing.
As a practical matter, I concede governments need to be able to distinguish between employees and independent contractors. But the current legal tests are too rigid. Indeed, North Carolina ought to clarify that one of them doesn’t apply in our state: the presumption that if companies help set up and fund non-wage benefits for workers, those workers are unlikely to be contractors.
The market for health insurance heavily skewed by the different ways governments treat money spent on premiums by employers (largely untaxed) and by households (largely taxed). I think it ought to be easier for gig workers and other contractors to access tax-advantaged group health insurance without losing their...
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