A common scenario many business owners face is hiring an independent contractor, who operates as a sole proprietor, for a task where the possibility for injury exists. Yet, you fail to obtain workers’ compensation coverage for this person because you assume if they were injured on the job, their independent contractor status would prohibit a claim against your insurance.

What you may not realize, however, is that just because someone is a sole proprietor of a business doesn’t automatically make them an independent contractor if they come to work for you. They may very well be considered an employee.

Determining whether someone is an employee or independent contractor is complicated by the fact that three separate agencies, your state Workers’ Compensation Board, your state Department of Labor and the IRS, each make a determination of status based on their own criteria. The IRS requirements can be found online at http://www.irs.gov. You can obtain state requirements by contacting your local Workers’ Compensation Board and Department of Labor office.

In spite of all of this seeming confusion, there are general rules of thumb you can utilize to determine if a worker should be considered an employee. The commonality among these criteria is that the employer directly controls the how, what, and when of the worker’s employment.

DIRECT EVIDENCE OF THE RIGHT TO CONTROL

• Do you have the right to require compliance with your instructions?
  
  
• Will you be training this person through meetings, classes, or apprenticeship with a more experienced worker?
  
  
• Will the worker’s services be integrated into your overall business operations?
  
  
• Do you set the number of hours this person will work?
  
  
• Will the worker devote full time hours to your business?
  
  
• Do you determine the order or sequence in which the worker’s tasks are performed?
  
  
• Is the worker required to submit regular oral or written reports?
  
  
• Do you pay the worker’s business expenses?

METHOD OF PAYMENT

• Do you provide this person with hourly, weekly, daily, monthly or other regular periodic payments?
  
  

FURNISHING OF EQUIPMENT

• Is the work being performed on your premises?
  
  
• Do you provide the worker with tools, materials, or other equipment?
  

RIGHT TO TERMINATE RELATIONSHIP WITHOUT LIABILITY

• Is the work being performed on your premises?
  
  
• Do you provide the worker with tools, materials, or other equipment?

Remember, a worker’s status is subject to the particulars of the specific work to be performed. While someone may qualify as an independent contractor for one assignment, they may become an employee for the next job. Therefore, you must always re-evaluate the worker’s status on regular basis to ensure compliance.

Many Americans are at significant risk of running out of money early in their retirement years, according to a report from the Employee Benefit Research Institute (EBRI). Based on this finding, the report indicates that people may benefit from taking their IRA or 401(k) plan payouts through a managed withdrawal or annuity option.

The report is based on EBRI's Retirement Security Projection Model, which examines whether people are on track to accumulate sufficient assets to maintain a basic standard of living in retirement. It focuses on Americans born between 1931-1941, over a ten-year study period (1992-2002). Thus, these individuals would have been 51-61 years old at the beginning of the study period, and 61-71 years old by the end of the study period. The study group included 24.4 million people.

This group of people are among the first to be affected by substantial changes to the American employment-based retirement market: namely, declining numbers of people are covered by defined benefit plans (traditional pensions that pay a set amount, usually monthly, over a set period of time) and increasing numbers of people are covered by defined contribution plans (such as 401(k) plans and IRAs). According to the report, among families with an employment-based retirement plan participant, the percentage with only a defined benefit plan declined from 40 percent to 19.5 percent over the ten-year study period, while the percentage with only a defined contribution plan increased from 37.5 percent to 57.7 percent.

As a result of this change in retirement plan coverage—and unlike retirees before them—people now entering retirement are more likely to be faced with managing lump-sum distribution payouts from their employment-based retirement plan, and with the challenge of making this money last throughout their retirement years.

The report looked at total wealth (assets minus debts), financial wealth (total wealth minus assets such as a home or business; in other words, the wealth one could spend without making large life changes), and IRA wealth.

• About 15 percent of the study group lost at least half of their total wealth over the study period.
  
  
• Almost 10 percent of the group lost all of their financial wealth, and more than a third lost a quarter of their financial wealth and were on track to lose it all. In contrast, just over half experienced growth in their financial wealth of 50 percent or more.
  
  
• More than a quarter (28 percent) of IRA owners lost all of their IRA wealth over the ten-year period, 34 percent lost half or more, and 37 percent lost a quarter or more.

The study broke out the 24.4 million individuals into various "demographic" categories—birth year, gender, race/ethnicity, marital status, health status, retired/working status, earnings income, and pension/annuity income—in an effort to examine the impact of such characteristics on wealth accumulation and depletion. For all of the types of wealth examined, a range of accumulation or depletion was present, both within and across demographic segments. For example, health status had a clear impact on the extent to which one's financial wealth declined or grew over the study period: financial wealth declined by half or more for only 23 percent of those who said their health was excellent or very good, but for 42 percent of those who characterized their health as poor. However, even among those with excellent/very good health, financial wealth grew for those at the 75th percentile and declined for those at the 25th percentile of responses.

The study concludes that despite some demographic groups being more successful than others in making their money last, every group had some individuals on the "right track" in wealth management and others on the wrong track. With lump sum retirement plan distributions becoming increasingly common, such disparities in wealth management "are certain to persist and quite possibly become larger," the report states. This calls for a focus on wealth management—in addition to wealth accumulation—in retirement financial planning.

All of us consider ourselves excellent drivers. But if we are all great drivers, why are there still so many car accidents? By following these safety guidelines, and everything else we’ve been taught about safe driving, you should be able to reduce the likelihood of becoming involved in an accident. There is no way to completely eliminate all risk of a crash, but you can always do your part to make the road a safer place for everyone.

• Eliminate distractions, such as talking on the phone, reading newspapers, changing radio stations or CDs, or eating while driving.
  
  
• Keep your vehicle properly maintained. Adhere to the maintenance schedule recommended for your car, and remember to have the tires checked, oil changed, and fluids leveled frequently.
  
  
• Drive defensively, but not aggressively. If another driver is being aggressive, ignore them, rather than reciprocate. Allow them to speed away from you, and try to relax or call the police to report aggressive driving.
  
  
• Take a defensive driving class to better prepare yourself for situations on the road.
  
  
• Maintain a safe distance between your vehicle and others. For every ten miles per hour you are driving, leave at least one car length of space between your vehicle and the one in front of you.
  
  
• Keep your mirrors adjusted properly. When entering a car or changing drivers, always check the mirrors and seats to make sure they are adjusted to your personal advantage. These are extremely dangerous to adjust while driving.
  
  
• Exercise great caution while driving through intersections. Most accidents occur at intersections, usually because a driver was not paying close attention to the light. Always count to three before proceeding when the light turns green.
  
  
• Be aware of the road conditions, and keep your lights on at dusk, dawn, or in hazardous weather conditions.
  
  
• Never, ever drink and drive.