SEI must be developed if there is a question as to whether the NH is an employee or
self-employed. However, if this is the only question, the SEI may be accepted as correct
A coverage question is raised by the claimant; or
The nature of the activity is such that if the person were an employee, the services
would be excluded from coverage; or
The issue must be resolved to ensure proper reporting in the future; or
The ER-EE question may affect others performing the same or similar services as the
NH. See RS 02101.808 for situations where employers may not be liable for Social Security taxes if an
employee was treated as an independent contractor.
EXAMPLE: Harold James filed an application for RIB and alleged self-employment as a securities
salesman. He performed services for the Biggs Corporation, a large brokerage firm
which utilizes the services of hundreds of securities salesmen.
Mr. James must be questioned about the circumstances under which he performed services
for the Biggs Corporation. If it appeared that the NH is in an employment relationship
similar to that described in SSR 72-58 at social security.gov and undertake full employer-employee
relationship development. See RS 02101.800 for a discussion of coverage development in employer and employee relationship cases.
It is possible that an ER-EE relationship exists between the Biggs Corporation and
its securities salesman, and that the amounts paid to the salesmen by the corporation
are not being properly reported as wages.
Unless it is obvious from the information in the claims development, the FO must document
the file as to the findings.