In WA state, at least, you’re an employee if you act like an employee. In fact, our state administers workers comp directly and our laws there basically assume that everyone is an employee until proven otherwise. I’ve been through real audits during which the state has said things like “Aha! So you admit that have no documentation to prove that this homeless guy you’ve never met wasn’t an employee!” :smack:
The specifics may vary, but most states are going to follow some rules like that - if you’re performing a service for a person who is paying you, then you’re either an independent contractor or an employee, and the law will tend to favor employee status unless you can show otherwise.
“Friends” under the law do not exchange services for money. There are times that this might a little blurry, but it really isn’t. A gift of money (which would be reportable as a gift by the giver if it was more than $14,000 a year) should have no expectation of services, repayment, etc. And if you’re just being a friendly neighbor by mowing his lawn, the same is true - there should be no expectation of repayment. If you want to get technical even a neighborly “I’ll mow your yard if you fix my car” is an exchange of services and should be reported as income at the fair market value of the services. (And now both of you are practicing trades that require licensing in my state, so you’re really screwed.) Of course, it’s not likely to be reported or enforced at a small scale.
If you receive $50,000 in “gifts” from a rapper and devote 9 months a year of your time to traveling with him “for fun”… well, good luck finding an auditor willing to swallow that line.
It is worth noting that an awful lot of employment law violations are actually reported by the employees. If you go to the state and ask for unemployment or worker’s comp benefits, they’ll start an investigation of your rapper friend to see if you really were an employee.
Now, keep in mind that not all rules apply to all employers. OSHA exempts those with 10 or fewer. COBRA exempts those with fewer than 20. The health care mandate exempts those with fewer than 50. (Even cities are getting in on it. The City of Seattle mandates paid time off, but only for those with 5 or more employees.)