Accurate determinations of employment are very important to Tax Department operations. Each determination of employment is considered separately. When an Employer misclassifies their workers as contract labor the commission loses tax money. In addition, the worker is denied benefits to which they might be entitled.

The Status Section receives inquiries regarding contract labor in two ways, via telephone and in writing.

An inquiry via telephone can be the result of an incoming call or an outgoing call.

When a contract labor inquiry is via a telephone call:

1. Obtain the facts of the situation.
   
   
2. Provide the caller a general explanation of employment and direction & control. Explain employee vs independent contractor.
   
   
3. Offer to send commission literature (C-8 Employment Status – A Comparative Approach) on independent contractors. This is also available on the Intranet.
   
   
4. If the situation is obvious independent contractors or obvious employment, verbally relay your interpretation to the caller and mail the caller a new Employer Packet or direct them to apply through the Internet where employment exists. Provide a caveat that this decision is subject to claims being filed and additional investigation.
   
   Written interpretations of contract labor should not be provided on the basis of a telephone call. If a caller requests a written response, instruct the caller to provide the situational facts in writing.
   
   
5. If the situation is not obvious:
   
   Refer in state calls to the local Field Tax office and provide the local Field Tax office telephone number.
   
   For out-of-state calls, assign an account number, send a letter, approved by your supervisor, enclosing a new Employer Packet and Form C-12. This letter should be traced for 3 months.

If a written inquiry regarding contract labor is received;

1. Send a field assignment by e-mail to Field Tax if the employer is in-state. Attach a copy of the written inquiry.
   
   
2. If the employer is out-of-state, assign an account number if needed and send a letter, approved by your supervisor, to the employer. Enclose Form C-12, contract labor literature and a Status Report. Trace the letter 3 months.

1. If a completed Form C-12 is received and/or returned and the employer is in-state.
   
   

2. If a completed Form C-12 is received and/or returned and the employer is out-of-state.
   
   

If the contract labor investigation involves the employment status of individuals who perform services for Driving Safety Schools and Driver Education Schools, Form C-12TEADS (299) is to be substituted for Form C-12.

The contract labor questionnaire (C-12) can be found at: https://intra.twc.state.tx.us/intranet/uir_tax/docs/c12.dot   

The questionnaires listed below can be requested from the State Office.

1. C-31     Landman Questionnaire
2. C-59     Cosmetologist Questionnaire
3. C-78     Truck Driver Questionnaire
4. C-85     Delivery/Courier Questionnaire
5. C-95     Product Demonstrator Questionnaire
6. C-105   Real Estate Broker Questionnaire