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Additional resources for Absorptive Capacity and Interpretation
Example: You start a new business and hire Malcolm, a local certified public accountant (CPA), to perform accounting and tax preparation services. Malcolm has a well-established CPA firm that represents dozens of clients. He has several employees and his own office, and he advertises in the local Yellow Pages. Malcolm is running an independent business. There is no way Malcolm will be viewed as your employee by the IRS or any other government agency. At the other end of the continuum are workers who are clearly employees.
Instructions Employees. Employers have the right to give their employees oral or written instructions that the employees must obey concerning when, where, and how they are to work. Independent Contractors. ICs need not comply with instructions on how to perform their services; they decide on their own how to do their work. They are, however, obliged to deliver the final product as called for in the agreement or contract. Watch out—this matter of instructions can be tricky. That’s because there is no requirement that instructions actually be given to an employee.
The specs define what the IC is supposed to do. The IC has no duty to do work that isn’t mentioned in the specifications. If there is an argument about whether the IC has performed adequately, a mediator, arbitrator, judge, or jury will look at the specs and compare them to the work actually performed to try to determine who’s right. • Deadline: How long does the agreement give the IC to complete the work? Usually, this date is contained in the “Term of Agreement” clause of our form agreements.