Legal Question in Employment Law in Minnesota

My company is adding a division. We would like to have national presence and plan to do so with sales people located in other states established as independent contractors. We post the position, people contact us. If they want to sell our service then we charge the for the business cards and other materials to begin. We send the materials with a dvd that talks about our auditing services to give them a better idea of what they're selling, but it's not a training dvd. They can research for their own leads or we will provide them with a generic list in their area. Also, we do not set a region. They then contact the company, get the appointment, attend the appointment, get the contract signed, gather some information, then send everything to our home office. At the home office we conduct the audit, submit the audit to the state for a refund request, when the client recieves the refund we invoice them for a percentage. When we recieve the fee then we issue a commission check to the sales person. At no time do we direct them with when and where, we don't tell them how many hours they need to work, nor do they ever work out of the main office. I'm the only other person that sells our service and that is strictly in MN. Under the IRS code, does this meet the qualifications as independent contractor?

We have not made this move yet but would like to if it meets IRS requirements.


Asked on 1/08/10, 7:06 am

1 Answer from Attorneys

David Anderson Anderson Business Law LLC

You should have an experienced Business Attorney review the full factual circumstances before proceeding, and if appropriate, absolutely have in place a written agreement with each IC.

There may be an opportunity to obtain advance approval from the IRS as well, but it can backfire in some cases.

Please feel free to call or email to set up a complimentary consultation.

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Answered on 1/13/10, 8:38 am


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