Depends on the contract. Part of being a contractor by IRS standards is being able to subcontract.
> Personal performance of services: An independent contractor should have the freedom to hire assistants or subcontract work to other workers or firms at his or her expense (this is where profit or loss could enter the picture). If you require the worker to perform the work personally, that's a sign of control and therefore indicative of employee status.
You misunderstand: someone is an employee when they fall under many of those categories, not just one. They aren't some kind of requirements/'standards' contractors must completely (or even mostly) adhere to.
Someone would be an employee rather than a contractor if they couldn't subcontract AND they had set hours AND they had to use your tools AND you set the work on a day to day basis. Many of those things need to be true, not just one to push someone from contractor to employee.
A. The worker is free from the employer's control or direction in performing the work.
B. The work takes place outside the usual course of the business of the company and off the site of the business.
C. Customarily, the worker is engaged in an independent trade, occupation, profession, or business.
In this case, again, depending on the contract signed, A would cover subcontracting unless it was explicitly prohibited by the contract. And maybe it was. But I have signed plenty of contracts with my personal name not my fictitious or LLC name that would not have been violated by having someone else perform the work.
Legally, maybe. In practice, when I was freelancing, I don’t think any of my clients would have been okay with me subcontracting the work. Amongst other reasons, I think most clients wouldn’t be happy with the idea that they could have paid someone else less to do the same work. (And yes, I understand that there’s a management aspect to subcontracting that may justify the difference, but most clients wouldn’t see it that way if they were expecting you to do the work by yourself.)
I don’t feel sympathy for that, because to me the very aspect of contracting is that you should be able to subcontract out the work. If they wanted me specifically to do the work, then they should have taken the time and effort and paid the taxes to hire me as a W2 employee. You can’t have it both ways.
You could absolutely have it both ways if both parties agree to those terms though. If the agreement is for the work to be performed by a specific person, either in word or intent, then it could be breach of contract.
Absolutely! My point is that if you are making an agreement for a specific person to perform the work instead of worrying about the outcome itself, perhaps you are really seeking employment instead of a contractual agreement.
This whole thread got super litigious around my comment that there is a defendable reality where people subcontract what you contracted them to do. It all depends on the contract wording.
Good counter example to me defending be able to subcontract would be performance agreements (e.g. I pay Foo Fighters $1m for a concert they can't send Weird Al in their place).
> Part of being a contractor by IRS standards is being able to subcontract.
Yes, but the contractor must still respect the other contractual obligations.
For example, they almost certainly signed a contract that they wouldn't share the codebase (NDA) or share access to the company's systems. The contractor would have clearly violated this by giving the code to someone else to work on and giving that person access to the company's Slack under someone else's name.
If he would have subcontracted an isolated task involving no trade secrets, no confidential information, and no access to the company's systems he would have been fine.
But you can't just hire someone in Romania and have them pretend to be you and log in with your credentials and have access to the company's proprietary materials. Being a contractor isn't an automatic license to ignore all of the things you've agreed to.
> Personal performance of services: An independent contractor should have the freedom to hire assistants or subcontract work to other workers or firms at his or her expense (this is where profit or loss could enter the picture). If you require the worker to perform the work personally, that's a sign of control and therefore indicative of employee status.