If your Company is audited by the Illinois Department of Employment Security (IDES) and you use independent contractors, you will (almost always!) be asked to complete the IDES Worker Relationship Questionnaire for each group or type of independent contractor.
PURPOSE OF QUESTIONNAIRE: The purpose of the Worker Relationship Questionnaire is to elicit enough factual responses from the Company that it becomes clear whether the independent contractors at issue are really independent contractors or employees.
Possibly the trickiest part of filling out the Worker Relationship Questionnaire is deciding how to describe the type of business the Company is in, and the type of business the independent contractor is in, and whether the Company and the independent contractor are in the same course or kind of business. Course or type of business is a crucial part of the IDES test for independent contractor status which is called Section 212(A), (B), and (C).
Remember that if the Company fails any one part of the three part test, then the independent contractor at issue will be found to be an employee for IDES purposes.
The Company is asked to select one representative independent contractor at issue-this is the "Worker" for purposes of the Worker Relationship Questionnaire. If there are 20 drywall installers, for example, the Company would fill out the Worker Relationship Questionnaire for one typical, representative drywall installer (i.e., Worker).
EXAMPLE OF A TRICKY QUESTION: One of the tricky questions on the Worker Relationship Questionnaire that gives particular trouble to my clients is the following question which is on page 2 under "Extent of Independent Status":
Does the worker represent himself to the public as being in business to perform the same or similar services?
Then you have to check the box "yes" or "no." If you say yes, you have to explain how the Worker represents himself to the public. "Yes" indicates independent contractor status.
What that question is really asking is if the Worker (for example, drywall installer) represents himself to the public (meaning advertising himself and his business) as being in business to perform the same or similar services (meaning his drywall installation services).
This is an extremely important question because it is asking if the independent contractor at issue really is self-employed and in business for himself. If he is really in business for himself, then he promotes his own drywall installer business. Examples would be having his business name on his truck, on t-shirts, and on promotional fliers that he hands out. He may advertise online or in the newspaper. He may send emails to local builders telling them about his services.
Many people innocently answer the question No-that the Worker does not represent himself to the public as being in business to perform the same or similar services. The reason they answer no is because they think the question is asking if the Worker does the same thing as the Company that is being audited.
This confusing question is just one of many confusing questions on the Worker Relationship Questionnaire. Have an attorney well versed in this area of the law assist you in filling out the Worker Relationship Questionnaire.
For assistance with an IDES audit, IDES Worker Relationship Questionnaire, and/or IDES Hearing or evaluating your use of Independent Contractors, contact Nancy Joerg at Wessels Sherman's St. Charles, Illinois office: (630) 377-1554 or email her at [email protected].