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May an employee also work as an independent contractor for the same employer?

Though  possible, it is not commonplace. For an individual to work as an independent contractor, the individual must meet certain classification requirements by both the Internal Revenue Service (IRS) and the U.S. Department of Labor (DOL) that demonstrate the individual is clearly self-employed.

If a current employee takes on extra work for an employer, that work must be evaluated against the DOL and IRS factors. If that evaluation shows the employer remains in control of the individual in the secondary role, the work is merely an extension of the employee's employment duties and the employee cannot be classified as an independent contractor for the extra work. 

In contrast, if the factors show that an independent contractor relationship exists, the employer could choose to treat the worker as an independent contractor for that extra work. This is most commonly seen when an employee has an established outside business. For example, an employee may have an office cleaning business and may clean the employer's offices in the evening through that business. In this instance, the worker determines how the cleaning work is done, the worker stands to make a profit or take a loss, and work performed is not a key aspect of the employer's business.

If an employer is unsure about the delineation between the employee's normal work and extra work the individual would be doing, it should review Checklist: Utilizing Independent Contractors and consult with an attorney prior to entering into any agreement with the person as a contractor. Employers may also request a determination from the IRS by submitting the Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.

For additional information, see Employing Independent Contractors and Other Gig Workers


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