As schools let out for the summer, farm employers may be hiring more youth workers. Employers should be aware of the minimum wage rules that apply to minors in their state and understand certain worker classifications when making hiring decisions.
Employee misclassification is a common employer mistake.
One pitfall is treating a worker as an independent contractor when the person is actually an employee.
Employees are entitled to a minimum wage (discussed more below) and are issued a W-2 to report wages paid, while independent contractors are not entitled to a minimum wage and are issued a Form 1099-NEC for non-employee compensation.
Employers are also required to withhold income taxes along with Social Security and Medicare taxes from wages paid to employees.
According to the IRS, the general rule is that an individual is an independent 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.
Although no one factor is definitive, facts that provide evidence of the degree of control and independence of a worker fall into three categories.
Behavioral — Does the company control or have the right to control what the worker does and how the worker does his or her job?
Financial — Are the business aspects of the worker’s job controlled by the payer? These include things like how worker is paid, whether expenses are reimbursed, and who provides tools and supplies.
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