ITG FAQ #3 Answer-Who is an employee?
Employees are defined in the Treasury Regulations as every individual who performs services subject to the will and control of an employer, both as to what is to be done and how it is to be done. The right to discharge, or to fire an employee, is an important indicator that the person having the right to discharge is an employer. The employee may have considerable discretion and freedom of action as long as the employer has the legal right to control both the method and the result of the employee’s work.
An employee may be called a partner, an agent, or an independent contractor and still meet the criteria of an employee. One’s title is immaterial if the legal relationship of employer and employee exists. Managers, other supervisory personnel and corporate officers are employees.
Factors considered when determining the worker status as an employee or independent contractor include: behavioral control; financial control; and the type of relationship between the business and the worker.
See also the section entitled Employee vs. Independent Contractor.