--- title: "Chicagoland SIA » Insurance producers: independent contractor vs. employee" description: Are your insurance producers independent contractors or employees? Find out why this classification matters: image: https://benefits.chicagolandsia.com/hubfs/Imported_Blog_Media/60673432_M.jpg --- [Skip to content](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee#main-content) [facebook-f icon](https://www.facebook.com/chicagolandsia/) [linkedin-in icon](https://www.linkedin.com/company/chicagoland-sia/) [Twitter icon](https://twitter.com/ChicagolandSia) [youtube icon](https://www.youtube.com/channel/UCjdqbj5lRfSQnvjjGVdrVPg) [![CSIAlogo-2-2](https://benefits.chicagolandsia.com/hs-fs/hubfs/CSIAlogo-2-2.png?width=200&height=118&name=CSIAlogo-2-2.png)](https://benefits.chicagolandsia.com/) - [Learn More](https://benefits.chicagolandsia.com/learn-more) - [Benefits](https://benefits.chicagolandsia.com/member-benefits) Show submenu for Benefits - [Market Access](https://benefits.chicagolandsia.com/access-to-markets) - [Increased Income](https://benefits.chicagolandsia.com/increased-income) - [Training and Learning](https://benefits.chicagolandsia.com/training-and-education) - [Agency Growth and Development](https://benefits.chicagolandsia.com/agency-development) - [Digital Strategy](https://benefits.chicagolandsia.com/digital-marketing-and-strategy-consultation) - [About Us](https://benefits.chicagolandsia.com/about-us) - [Resources](https://benefits.chicagolandsia.com/resources) Show submenu for Resources - [Blog](https://benefits.chicagolandsia.com/chicagoland-sia-blog) - [Video Series](https://benefits.chicagolandsia.com/beyond-the-dec-page-video-series) - [Podcast](https://benefits.chicagolandsia.com/licensed-to-talk-insurance-podcast) - [Free Downloadable Guides](https://benefits.chicagolandsia.com/free-digital-content-strategy) - [Press Releases](https://benefits.chicagolandsia.com/press-release) - [Our Team](https://benefits.chicagolandsia.com/our-team) - [Make a Payment](https://chicagolandsia.appliedpay.com/) Open main navigation Close main navigation - [Learn More](https://benefits.chicagolandsia.com/learn-more) - [Benefits](https://benefits.chicagolandsia.com/member-benefits) Show submenu for Benefits - [Market Access](https://benefits.chicagolandsia.com/access-to-markets) - [Increased Income](https://benefits.chicagolandsia.com/increased-income) - [Training and Learning](https://benefits.chicagolandsia.com/training-and-education) - [Agency Growth and Development](https://benefits.chicagolandsia.com/agency-development) - [Digital Strategy](https://benefits.chicagolandsia.com/digital-marketing-and-strategy-consultation) - [About Us](https://benefits.chicagolandsia.com/about-us) - [Resources](https://benefits.chicagolandsia.com/resources) Show submenu for Resources - [Blog](https://benefits.chicagolandsia.com/chicagoland-sia-blog) - [Video Series](https://benefits.chicagolandsia.com/beyond-the-dec-page-video-series) - [Podcast](https://benefits.chicagolandsia.com/licensed-to-talk-insurance-podcast) - [Free Downloadable Guides](https://benefits.chicagolandsia.com/free-digital-content-strategy) - [Press Releases](https://benefits.chicagolandsia.com/press-release) - [Our Team](https://benefits.chicagolandsia.com/our-team) - [Make a Payment](https://chicagolandsia.appliedpay.com/) Oct 2, 2019, 12:00:00 AM # Insurance producers: independent contractor vs. employee [Chicagoland SIA](https://benefits.chicagolandsia.com/chicagoland-sia-blog/author/chicagoland-sia) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee) [Twitter icon](https://twitter.com/intent/tweet?url=https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee) [envelope icon](mailto:?body=https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee) An insurance producer is hired to find new prospects for an insurance agency and turn those prospects into clients by convincing them to purchase an insurance policy. He or she may be designated as an employee or as an independent contractor. There have been [legal rulings](https://www.natlawreview.com/article/insurance-agents-properly-classified-independent-contractors-circuit-court-rules?utm_source=s5_mobile_site&utm_medium=mobile&utm_campaign=s5_87710) both ways as to the proper classification of insurance agents/producers. Does it matter which classification you choose? It does matter. Here is why. There are possible legal ramifications and potential fines if you have an employee classified incorrectly. Misclassification of employees can also have costly tax consequences. An agency owner should consider the [IRS criteria for independent contractors versus employees](https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee?utm_source=s5_mobile_site&utm_medium=mobile&utm_campaign=s5_87710) when determining how to classify employees. The IRS definition of an independent contractor looks at these aspects: behavioral, financial and the type of relationship. Some of the questions to ask include: do you set the producer’s work hours? Do you pay travel expenses for the producer? Do you control what the producer does and how he or she does their job? Are there any written contracts or employee benefits given? There do seem to be some advantages to hiring insurance producers as independent contractors, including decreased costs in taxes, heath insurance, benefits, etc. If a producer is hired as an independent contractor, they pay their own business expenses, taxes, worker’s compensation insurance, etc., however, they will also likely be receiving a greater commission rate than a salaried producer whose business expenses are paid by the hiring insurance agency. The legal classification of an independent contractor varies from state to state and is subject to change. If you have questions regarding the classification of any of your producers as independent contractors, please contact a legal advisor to make sure you adhere to the laws of your state. You may also complete [IRS Form SS-8](https://www.irs.gov/pub/irs-pdf/fss8.pdf?utm_source=s5_mobile_site&utm_medium=mobile&utm_campaign=s5_87710) and have the IRS determine the worker status for the purposes of employment taxes and tax withholding. [Agency Management](https://benefits.chicagolandsia.com/chicagoland-sia-blog/tag/agency-management) ## Related posts [![Male insurance agents are giving advice and completing and insurance application such as for home, car, commercial, etc.](https://benefits.chicagolandsia.com/hs-fs/hubfs/male-insurance-agents-are-giving-advice-and-signin-2023-05-26-00-21-03-utc-1.jpeg?height=200&name=male-insurance-agents-are-giving-advice-and-signin-2023-05-26-00-21-03-utc-1.jpeg)](https://benefits.chicagolandsia.com/chicagoland-sia-blog/stricter-practices-in-the-hard-insurance-market-how-carriers-scrutiny-of-insurance-applications-can-impact-claims-denials) ## [Stricter Practices in the Hard Insurance Market: How Carriers' Scrutiny of Insurance Applications Can Impact Claims Denials](https://benefits.chicagolandsia.com/chicagoland-sia-blog/stricter-practices-in-the-hard-insurance-market-how-carriers-scrutiny-of-insurance-applications-can-impact-claims-denials) ![Picture of Amanda Yaniz](https://benefits.chicagolandsia.com/hs-fs/hubfs/Amanda%20Yaniz-1.jpg?width=50&name=Amanda%20Yaniz-1.jpg) [Amanda Yaniz](https://benefits.chicagolandsia.com/chicagoland-sia-blog/author/amanda-yaniz) Jul 27, 2023, 12:00:00 AM In a hard insurance market, where insurance carriers face challenging economic conditions or... [Read more](https://benefits.chicagolandsia.com/chicagoland-sia-blog/stricter-practices-in-the-hard-insurance-market-how-carriers-scrutiny-of-insurance-applications-can-impact-claims-denials) [![](https://benefits.chicagolandsia.com/hs-fs/hubfs/Imported_Blog_Media/9751580_M.jpg?height=200&name=9751580_M.jpg)](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/are-your-clients-covered-for-identity-theft) [Insurance Markets](https://benefits.chicagolandsia.com/chicagoland-sia-blog/tag/insurance-markets), [Insurance Tips](https://benefits.chicagolandsia.com/chicagoland-sia-blog/tag/insurance-tips), [Cyber Secruity](https://benefits.chicagolandsia.com/chicagoland-sia-blog/tag/cyber-secruity) ## [Are your clients covered for identity theft?](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/are-your-clients-covered-for-identity-theft) [Chicagoland SIA](https://benefits.chicagolandsia.com/chicagoland-sia-blog/author/chicagoland-sia) Apr 3, 2019, 12:00:00 AM Did you know that identity theft costs American consumers more than $16 billion each year? Even... [Read more](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/are-your-clients-covered-for-identity-theft) [![](https://benefits.chicagolandsia.com/hs-fs/hubfs/Imported_Blog_Media/56450053_S.jpg?height=200&name=56450053_S.jpg)](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/emerging-markets-environmental-insurance-coverage) [Insurance Markets](https://benefits.chicagolandsia.com/chicagoland-sia-blog/tag/insurance-markets) ## [Emerging markets: Environmental insurance coverage](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/emerging-markets-environmental-insurance-coverage) [Chicagoland SIA](https://benefits.chicagolandsia.com/chicagoland-sia-blog/author/chicagoland-sia) Mar 6, 2019, 12:00:00 AM We hear a lot these days in the insurance world about cyber security and cyber liability coverage.... [Read more](https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/emerging-markets-environmental-insurance-coverage) [facebook-f icon](https://www.facebook.com/chicagolandsia/) [linkedin-in icon](https://www.linkedin.com/company/chicagoland-sia/) [X Twitter icon](https://x.com/ChicagolandSia) --- [![CSIAlogo-2-2](https://benefits.chicagolandsia.com/hs-fs/hubfs/CSIAlogo-2-2.png?width=200&height=118&name=CSIAlogo-2-2.png "CSIAlogo-2-2")](https://benefits.chicagolandsia.com/) 240 S. Westmore Meyers Road, Lombard IL 60148 Copyright © 2026, Chicagoland SIA, LLC ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Chicagoland SIA", "url" : "https://benefits.chicagolandsia.com/chicagoland-sia-blog/author/chicagoland-sia" }, "dateModified" : "2022-08-24T15:41:27.946Z", "datePublished" : "2019-10-02T05:00:00.000Z", "headline" : "Chicagoland SIA » Insurance producers: independent contractor vs. employee", "image" : [ "https://benefits.chicagolandsia.com/hubfs/Imported_Blog_Media/60673432_M.jpg" ], "mainEntityOfPage" : { "@id" : "https://benefits.chicagolandsia.com/chicagoland-sia-blog/post/insurance-producers-independent-contractor-vs-employee", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://benefits.chicagolandsia.com/hubfs/CSIAlogo.png" }, "name" : "Chicagoland SIA, LLC" } } ``` ```json { "@context" : "https://schema.org", "@id" : "https://benefits.chicagolandsia.com/#organization", "@type" : "Consortium", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Lombard", "addressRegion" : "IL", "postalCode" : "60148", "streetAddress" : "240 S. Westmore Meyers Road" }, "alternateName" : "CSIA", "areaServed" : [ { "@type" : "State", "name" : "Illinois" }, { "@type" : "AdministrativeArea", "name" : "Chicagoland" } ], "description" : "Chicagoland SIA is an alliance of independent insurance agencies dedicated to the creation, retention, growth, and evolution of independent insurance agencies.", "email" : "chicagolandsia@chicagolandsia.com", "foundingDate" : "2005", "knowsAbout" : [ "Independent insurance agencies", "Insurance agency growth", "Insurance agency development", "Insurance carrier access", "Insurance agency training", "Insurance agency marketing", "Digital strategy for insurance agencies", "Captive to independent insurance agency transition" ], "logo" : { "@type" : "ImageObject", "height" : 1005, "url" : "https://benefits.chicagolandsia.com/hubfs/CSIAlogo.png", "width" : 1705 }, "memberOf" : { "@id" : "https://www.siaa.com/#organization", "@type" : "Consortium", "name" : "SIAA", "url" : "https://www.siaa.com/" }, "name" : "Chicagoland SIA", "sameAs" : [ "https://www.facebook.com/chicagolandsia/", "https://www.linkedin.com/company/chicagoland-sia/", "https://twitter.com/ChicagolandSia", "https://www.siaa.com/" ], "telephone" : "+1-630-629-0552", "url" : "https://benefits.chicagolandsia.com/" } ``` ```json { "@context" : "https://schema.org", "@id" : "https://benefits.chicagolandsia.com/#website", "@type" : "WebSite", "inLanguage" : "en-US", "name" : "Chicagoland SIA", "publisher" : { "@id" : "https://benefits.chicagolandsia.com/#organization" }, "url" : "https://benefits.chicagolandsia.com/" } ```