Here’s how to tell if you need a freelancer, or new employee

From withholdings to workers’ compensation, unemployment benefits to paid time off, it’s important to set up your freelance workers as independent contractors.


“Employers want to make sure they are not unknowingly hiring an employee,” said Jeffrey Stewart, an attorney at White and Williams LLP in Lehigh County, who specializes in employment and labor law.

It all comes down to who exercises control, he said.

The IRS has tests to help companies determine if they’re hiring a freelancer or if they’re actually making a direct-hire so problems can be avoided for everyone.

Consider these questions and steps when creating employment agreements to hire a freelance or independent contractor.

  • What is the need and what tasks do the contract state?
  • Is the task a distinct project?
  • Are you [the employer] comfortable with the arrangement?
  • Can the person doing the work report both profit and loss?
  • Who provides the equipment for the work to be completed?
  • Is there training involved, and who is responsible for providing it?
  • Who is paying the taxes?

Once those questions are answered:

  • Independent contractors are paid on a tax 1099 form basis.
  • Document payments made to contractors.
  • Get a W9 form completed by the freelancer at the beginning of the relationship.

“Some states are starting to regulate the gig economy,” Stewart said.

Watch California.

In September, 2019, California Law AB-5 Worker Status, [Assembly Bill 5] was passed and restricts the number of stories reporters and journalists may sell to a single publication during a 12 month period. After the limit, they must be considered employees of the publications.

Other professions such as doctors, accountants, travel agents and fishermen are exempt from the California “gig worker” law.

“This tells me that a lot of people have a lot of interest in this topic… what is true today may not be true two years from now,” Stewart said.

Projects in Cumberland, Lehigh counties receive more than $7M in state grants, loan

A commercial development in Cumberland County and natural-gas expansion project for a Lehigh County business park were among the recipients of state grant and loan funds announced Wednesday.

The state Department of Community and Economic Development said that nearly $6.3 million was awarded to the Cumberland County Industrial Development Authority through the Business in Our Sites program, which is under the Commonwealth Financing Authority. Another $1 million state grant was approved for the Lehigh Valley Economic Investment Corp.

The Cumberland County funds – a $2.5 million grant and $3.75 million loan – will be used for phase two infrastructure costs tied to the construction of the Oakwood Hills development near Messiah College in Upper Allen Township.

Oakwood Hills is a commercial project that Rider Musser Development is building off U.S. Route 15. The multi-phase project includes a hotel with meeting space, medical office space, a bank and restaurants. A large apartment phase has been under construction with units expected to open this summer.

Oakwood Hills is comprised of three tracts of land totaling more than 100 acres between West Lisburn, Mill and Bumble Bee Hollow roads. Messiah College bought the farmland over the last 20 years. The college’s board of trustees then created the independent for-profit corporation, Rider Musser, to oversee day-to-day operations and decision-making related to the development.

The state funding will help pay for excavating and grading, stormwater management, installation of utilities, water and sewer systems, road paving and landscaping on about 53 acres of the development. That work is expected to cost about $12.9 million.

The Lehigh County grant will help extend natural gas service to the Arcadia West Business Park in Weisenberg Township.

The pipeline expansion work will serve 14 current businesses and 15 residential properties, while also benefiting future hotel and retail development planned for an additional seven acres in the park.