A frequent question arises regarding when an employee is an independent contractor and when is he just a regular employee.  Many employers have moved to using independent contractors instead of employees.  The status of independent contractor can save the employer significant amounts of money in employment taxes, social security payments, etc.

But, the IRS understands that employers

The San Antonio chain of car washes, known as the "Wash Tub," has agreed with the Department of Labor to pay $246,438 in back wages.  The chain deducted so many items from some workers’ checks that their wages came to less than minimum wage.  They failed to pay overtime wages and failed to record time