preview

Abc Inc.

Satisfactory Essays
n this scenario, Mike is an accountant that has an office which he rents. As it is getting near tax season, he has contracts with different companies to organize books and to do taxes for companies. One of those is ABC Inc., who contracted with him to organize the books and to prepare the taxes for the year. The contract says that he is to be paid a lump sum at the time he files the taxes for the company and if he does not complete the taxes by April 15 for ABC Inc., Mike will be held liable for damages. It also says ABC Inc. cannot fire Mike unless there is a breach of contract by Mike. Mike comes and goes at the company when he has to acquire information needed to do the job, sometimes working on one of the company’s computers in order to do so, but for the most part he does the majority of the work from his office.…show more content…
He has his own office, which shows that he does not depend on ABC Inc. for a place to work and also completes most of the work at his office as well, unlike employees who depend on their employer for a place to work and complete most of it there. Mike has other clients who he offers his services to, which he would not be able to do if he were an employee. He is not paid per hour, week, or month, which also points to him not being an employee. According to the 20 factor test, since Mike will be liable if he does not complete the contract and ABC Inc. cannot fire him unless he breaches the contract, this also indicates him as being an independent contractor. Overall, 20 factor test is used to determine how much control a company has over a person, to determine if they are an employee or an independent contractor. Due to the lack of control of ABC Inc. over Mike and how he completes the contract, Mike is considered an independent
Get Access