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e. Principal’s Right of Discharge
Petitioner’s consulting agreement was nonexclusive, and
either party could terminate the agreement with 30 days’ written
notice. This factor favors a nonemployee relationship.
f. Work as an Integral Part of Principal’s Business
After petitioner entered into the consulting agreement, she
was no longer as integral to CTI’s business as she was
beforehand. She worked fewer hours for CTI, the agreement lasted
only one year, she could pursue other consulting opportunities,
and she gave up all responsibility for CTI’s human resource
department. This factor favors a nonemployee relationship.
g. Relationship of the Parties
Petitioner and CTI entered into a nonexclusive
consulting agreement that stated specifically that petitioner was
an independent contractor. In addition, CTI calculated
petitioner’s income from her exercise of the stock options
pursuant to section 83, as if she was not a CTI employee for the
3 months before the date of that exercise. Further, petitioner
notified CTI’s section 401(k) plan that she had ceased working
for CTI as an employee on January 12, 2001. This factor favors a
nonemployee relationship.
h. Employee Benefits
During the period covered by the consulting agreement, CTI
paid petitioner’s health benefits pursuant to a plan for its
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Last modified: November 10, 2007