Behavioral control means how you and your workers deal with each other on the job. Giving instructions, providing training and using evaluation systems are all strong evidence that you have the right to control a worker on the job and make the worker look like an employee in the IRS’s eyes.
a. Instructions
The single most important factor in the common law test is instructions. In the worker classification context, instructions means telling—or having the right to tell even if you don’t exercise that right—a worker how to get the job done. Instructions include telling a worker:
- when to do the work
- where to do the work
- what tools or equipment to use
- what workers to use to assist with the work
- where to purchase supplies or services
- what work must be performed by a specified person
- what routines or work patterns the worker must follow, and
- what order or sequence to follow in doing the work.
The more detailed the instructions the worker is required to follow, the more control the hiring firm exercises over the worker, and the more the worker looks like an employee. Requiring a worker to obtain prior approval before taking an action also constitutes instructions.
EXAMPLE: Tanya is a truck driver who makes local deliveries for Zebra, Inc. She reports to the warehouse every morning. The warehouse manager tells Tanya what deliveries have to be made, how to load the cargo in the truck, what route to take and the order in which various elements of the cargo are to be delivered. These are instructions on how the work is to be done and strongly indicate that Tanya is Zebra’s employee.
In contrast with the instructions listed above that tell a worker how to do the job, instructions about the end results a worker must achieve are perfectly consistent with IC status. Indeed, virtually every hiring firm instructs its ICs about what must done—for example, when the work must be completed and what form the finished work product should take.
EXAMPLE: John, a self-employed truck driver, receives a call from Acme, Inc., to make a delivery run from the Gulf Coast to the Texas Panhandle. John accepts the job and agrees to pick up the cargo the next morning. Upon arriving at the warehouse, John is given an address to which to deliver the cargo and is told that the delivery must be completed in two days. These instructions concern what must be done, not how it is to be done, and are therefore consistent with IC status.
The IRS distinguishes between giving instructions on how to work and giving suggestions. A suggestion about how work is to be performed does not constitute the right to control. For example, a dispatcher may suggest that an IC truck driver avoid a particular highway because of traffic congestion. If the worker is free to ignore the advice and use the highway anyway, then the dispatcher’s comment is merely a suggestion and consistent with IC status. If complying with the comment is mandatory or if the worker would suffer adverse consequences for noncompliance, however, then the comment is, in fact, an instruction and consistent with employee status.
Similarly, hiring firms can require ICs to comply with government or industry body rules and regulations. However, if the firm establishes more stringent guidelines than those required by the government or industry body, the IRS will view them as instructions indicating employee status.
Highly skilled professionals such as doctors, lawyers, accountants, engineers and computer specialists usually receive few, if any, instructions about how to perform their services. Firms that hire such workers frequently lack the knowledge necessary to give them such instructions. For this reason, in analyzing the status of professional workers, the IRS focuses more on the other two areas that we describe in this section: financial details of how the work is performed and evidence concerning the relationship of the parties.
Caution Company Uniforms and Logos
In the past, the IRS viewed a firm’s edict that workers wear company uniforms or put company logos on their vehicles as indicating employee status. Not any more. The IRS now recognizes that concerns about safety cause many businesses to tell their customers that the workers will be in a company uniform or have a company logo on their vehicles. Requiring a worker to don a uniform or logo for security purposes is now not viewed as an indicator of employee status.
b. Training
Providing a worker with periodic or ongoing training about procedures to be followed or methods to be used on a job is a strong indicator of employee status. However, the IRS now recognizes that not all training rises to this level. You may provide an IC with a short orientation or information session about your company policies, new product line or new government regulations without jeopardizing the worker’s IC status. Moreover, workers who attend training programs that are voluntary and for which they are not paid do not automatically lose their status as ICs.
c. Evaluations
Like instructions, evaluation systems are used by virtually all businesses to monitor the quality of work performed by workers. It is permissible to evaluate the quality of an IC’s final work product. However, you should not use an evaluation system to measure compliance with performance standards concerning the details of how the work is performed. This shows you’re trying to control how the worker does his or her job, which indicates employee status.