For many individuals, self-employment as an independent contractor can be a rewarding and satisfying career option. As is true with any employment relationship you enter, it’s important to understand the roles and responsibilities of everyone involved.
Q10. How can I tell if I am an “employee” or an “independent contractor”?
Checklist “Employee” or “Independent Contractor”
Employee or independent contractor? Below are examples of the questions the courts may review in making a determination. The most important consideration is that of control: Does the employer have the right to control or direct only the result of the work, and not the means and methods of accomplishing the result? If so, it is more likely that the worker will be considered an independent contractor. Thus, the following factors may be considered in determining whether the employer has sufficient control over the worker to result in employment status. Note that there are factors that are common to both “independent contractor” and “employee”; therefore, it is best to look at the relationship as a whole rather than focusing on one or two factors. The bottom line: The more the relationship looks like an employer/employee relationship, where the employer has the right to control the means and methods of accomplishing the desired results, the more likely it is that the courts will view it as such.
- Is the worker required to follow specific instructions as to the means and manner of performing the work? (Yes=Employee; No=Independent Contractor)
- Is there a set amount of hours and days that the person must work each week? (Yes=Employee; No=Independent Contractor)
- Does the employer supply the office, equipment, and tools needed to accomplish the work? (Yes=Employee; No=Independent Contractor)
- Must the work be performed on the employer’s premises? (Typically, a “yes” answer would indicate the person is an employee; however, there are instances where an independent contractor would be required to perform on the premises. You would need to consider your answer to this question in relation to everything else.)
- Is the worker trained by the employer to perform the assignments? (Yes=Employee; No=Independent Contractor)
- Is the assigned work a part of the regular business of the employer? (Yes=Employee; No=Independent Contractor)
- How long does the relationship continue? (In general, the longer the relationship continues, the more the worker looks like an employee.)
- Can the employer assign additional projects to the worker? (Yes=Employee; No=Independent Contractor)
- Is the person paid in the same manner as employees, e.g., biweekly? (Again, typically a “yes” indicates the person is an employee, but there may be instances where the independent contractor is paid in the same or similar manner. Here again you will need to consider this factor in relation to all other factors.)
- Can the worker hire assistants? (Yes=Independent Contractor; No=Employee)
- Does the worker provide services to more than one firm? (Yes=Independent Contractor; No=Employee)
- Does the worker make his or her service available to the general public? (Yes=Independent Contractor; No=Employee)
- Is there a written contract between the parties delineating their rights and responsibilities? (Yes=Independent Contractor; No=Employee)
- Can either the worker or the employer terminate the relationship at will? (Yes=Employee; No=Independent Contractor)
- Is the worker making any investment into facilities or equipment, and will the person realize a profit or risk of loss? (Yes=Independent Contractor; No=Employee)