I am a part of a Classical Conversations community with a Foundations/Essentials director. The Foundations/Essentials directors hire tutors to run the classrooms on community day.
I am concerned that the tutors are being treated as employees even though they are paid as independent contractors. Can a Foundations director hire tutors as independent contractors and still be able to specify what time they start, what material to cover and for how long they are to cover it, require training in the summer and training every 6 weeks of class etc?
Would a contract help? It seems like the contract could call the tutor an independent contractor but the Director could still treat them like employees.
This is hugely concerning and our campus wants to operate in a legal way. We are considering hiring a lawyer to help us understand all this. Is the lawyer the way to go? Or would you be able to advise on how to handle this?
We want to be legal and try to sort out truth in this whole legal situation.
Thank you for your time,
Thank you for contacting me. I have been talking to several Classical Conversation (CC) Directors and tutors about worker classification. It’s a confusing and complex topic!
Factors: control and key activity
The question of whether CC tutors are independent contractors (IC) or employees involves many factors to consider including some you mentioned such as training, specific time and place to work, the curriculum to use, etc. But you are majoring in the minors and neglecting the overarching issues.
Two overarching factors to consider are:
- the amount of control the Director exerts (or has the right to exert) over the worker
- if the tutors are providing the key activity of the business.
By the way, these factors of control and providing a key activity apply to all types of homeschool groups, not just Classical Conversations.
Some homeschool organizations may depend heavily on the tutors’ services as the key activity of the business, while other homeschool groups may not use tutors as the key activity because they rely on volunteer parents to teach their classes.
My conclusion: CC tutors are employees
In my professional opinion as a CPA qualified and licensed to practice before the IRS and after much research and interviews with CC Directors, I conclude that CC tutors provide the key activity of the business and the Director has the right to exert control over the tutor, making them employees.
Would a contract help?
You asked, “Would a contract help? It seems like the contract could call the tutor an independent contractor but the Director could still treat them like employees.”
You’ve hit the nail on the heard. Having a contract is not assurance that a tutor is an independent contractor; how they are treated carries more weight in determining proper worker classification.
My book Paying Workers in a Homeschool Organization will help. It explains both the current criteria the IRS uses and the criteria they have used in the past to determine independent contractor or employee status.
You could, of course, convert all your tutors to employees, and sleep better at night! One of HomeschoolCPA’s Recommended Homeschool Consultants can explain the steps you’ll need to take. It will be more paperwork and more expense, but you won’t worry about an IRS investigation on worker status.