TN 3 (07-09)

RS 02101.046 Place Where Work is Performed


IRS Revenue Ruling 56-694

A. Employee Status

The worker performing work on the employer's premises is not control in itself. However, it does imply that the employer has control, especially when the work can be done elsewhere. A person working in the employer's place of business is physically within the employer's direction and supervision. The use of desk space, telephone, and office equipment provided by an employer places the worker under the employer's direction and supervision unless the use of this equipment or facilities is optional.

Work performed off the premises indicates some freedom from control. However, this fact alone does not mean that the worker is not an employee. In some occupations, the services are performed away from the premises of the employer by necessity (i.e., appliance and other service technicians, construction contractors, or taxicab drivers). Control over the place of work is indicated when the employer for whom the services are performed has the right to:

  • canvass a territory within a certain time;

  • compel the worker to travel a designated route; or

  • work at specific places as required.

B. Independent Contractor Status

Independent contractors may complete the work wherever they desire as long as the contract requirements are met. The facts and circumstances must be considered. For instance, independent contractors may work on their client’s premises for convenience (i.e., repairing photocopiers, performing work on a house, etc.).

C. Performing services at one location vs. different locations

1. One location

In most cases, an employee’s services can be performed at only one location. For example, repairing faulty wiring requires an electrician to be at the site of the problem. This requirement is necessary to do the work but does not dictate how the work is performed.

2. Different locations

Work can be performed at many different locations. For example, modern technology allows some employees to work at alternate duty stations (tele-commuting). Working off-site at alternate duty stations is consistent with both independent contractors and employer-employee relationships. For example, a worker can work at home under a tele-commuting arrangement with the employer and still be an employee of the firm. Sometimes the tele-commuter can set his or her hours and may have flexibility in determining the order of their services. If practical, an independent contractor may do the work at their own home or place of business since the necessary tools and equipment are maintained there.

D. Reference

Social Security Handbook, Chapter 812 : Do you work on premises?

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RS 02101.046 - Place Where Work is Performed - 11/13/2009
Batch run: 07/03/2014