N.M. Admin. Code § 3.2.105.7

Current through Register Vol. 35, No. 18, September 24, 2024

Section 3.2.105.7 - DEFINITIONS - EMPLOYEE

A. In determining whether a person is an employee, the department will consider the following indicia:

(1) is the person paid a wage or salary;

(2) is the "employer" required to withhold income tax from the person's wage or salary;

(3) is F.I.C.A. tax required to be paid by the "employer";

(4) is the person covered by workmen's compensation insurance;

(5) is the "employer" required to make unemployment insurance contributions on behalf of the person;

(6) does the person's "employer" consider the person to be an employee;

(7) does the person's "employer" have a right to exercise control over the means of accomplishing a result or only over the result (control does not mean "mere suggestion").

B. If all of the indicia mentioned Subsection A of Section 3.2.105.7 NMAC are present, the department will presume that the person is an employee. However, a person may be an employee even if one or more of the indicia are not present.

C. The following examples illustrate the provisions of Section 3.2.105.7 NMAC.

(1) Example 1: B is a carpenter who works for Y and is paid on an hourly basis. Y withholds income tax from the money paid to B. Y treats B as an employee and controls the details of B's work. B is covered by Y's workmen's compensation insurance. B is an employee working for a wage or salary. B does not have to report the wages as gross receipts.

(2) Example 2: A sells bibles door to door for the X Bible Company. X pays A a commission, does not control the details of A's work, is not required by applicable law to withhold income tax from A's commission, and is not required to make unemployment insurance contributions on A. A is not an employee. A is an independent contractor and is subject to the gross receipts tax on A's commissions.

(3) Example 3: Q is a used car salesman for the R Used Car Center. Q receives a 3% commission on each car Q sells. R retains authority to supervise all sales Q makes and approves all sales before they can become final. Every two weeks R issues Q a check based upon the commissions Q has earned. R withholds federal and state income taxes and F.I.C.A. taxes. Q is an employee of R.

N.M. Admin. Code § 3.2.105.7

9/29/67, 12/5/69, 3/9/72, 11/20/72, 3/20/74, 7/26/76, 6/18/79, 4/7/82, 5/4/84, 4/2/86, 11/26/90, 11/15/96; 3.2.105.7 NMAC - Rn, 3 NMAC 2.17.7 & A, 5/15/01