As the worker: If the worker is a contractor and not considered an employee, he/she must:
- Pay self-employment taxes (Social Security and Medicare-related taxes)
- Make estimated federal and state tax payments
- Handle his/her own benefits, insurance and bookkeeping
- Payment and penalties related to Social Security and Medicare taxes
- Payment of possible overtime, including penalties for a contractor reclassified as an employee
- A legal obligation to pay for benefits
The more reasonable your basis for classification and the more consistently it is applied, the more likely an independent contractor classification will not be challenged.