Employee or Independent Contractor?


Many workers and their employers believe that if they have a written or oral contract with the person who hires them that they are an "Independent Contractor," then that's what they are. The law doesn't see it that way. Many times, workers are hired as "independent contractors" so the employer can evade taxes, overtime, unemployment, Workers' Compensation, and other obligations of an employer. A Court will see such an arrangement as a sham and disregard it.

The law looks at each situation on a fact specific basis. The most important factor is CONTROL. Does the company hold the worker responsible for the result only, or must the worker carry out the assigned duties according to the company's rules? If the latter, the worker is more likely than not to be an employee. Other factors include:

1. Does the worker hold him/herself out as a separate business to the public or as part of the company the worker serves? If the worker is not distinctly separate business enterprise, the worker is likely an employee.
2. If the worker's business cards have the employer's logo on it, and not the worker's own logo, the worker is likely an employee (even though the worker may have to purchase the cards).
3. Does the worker have a significant financial investment in the enterprise? If the worker uses the company's computer and telephone, the worker is likely an employee. The fact that the worker may purchase small tools or supplies is irrelevant.
4. Are the services performed at the company's place of business, or at a place of the company's choosing? If so, the worker is likely an employee.
5. Does the company provide training or orientation? If so, the worker is likely an employee.
6. Are there defined working hours? Are there mandatory meetings? If so, the worker is likely an employee.
7. Does the worker have a supervisor or report to someone? If so, the worker is likely an employee.
8. Does the worker perform work which is in the employer's main line of business, or does the worker do the same thing the company's employees do? Example: employer is a nurse staffing company. Worker recruits nurses and places them in hospitals. Worker is likely an employee.
9. Is the worker paid any kind of a guaranteed amount of money per week or month? If so, the worker is likely an employee.
10. Does the company provide benefits to the worker? If so, the worker is likely an employee, even if the employee pays for part of the benefits, like health insurance.
11. Does the company require the worker obey its policies as a condition of continuing to provide services? If so, the worker is likely an employee.
12. Must the worker wear the company's uniform or display the company logo on the worker's car? If so, the worker is likely an employee.
13. Is the worker paid by time spent, or by the job? If by time spent, the worker is likely an employee.
14. Does the worker invoice the company for the services provided? If not, the worker is likely an employee.
15. Does the company pay the worker's business expenses? If so, the worker is likely an employee.
16. Does the worker have special training or skill, such as a professional degree, certificate, or training? If not, the worker is likely an employee.
17. Does the worker supervise others or make decisions for the company? If so, the worker is likely an employee.
18. Does the worker have a license in a profession for which a license is required? Does the worker have a business license? If the worker has no license, the worker is likely an employee.
19. Does the worker provide the workers own tools? If not, the worker is likely an employee.
20. Do worker and company contemplate a continuing relationship? If yes, the worker is likely an employee.
21. Does the worker devote substantially all working hours to the company, like a full-time worker? If so, the worker is likely an employee.
22. Does the worker work only for one company? If so, the worker is likely an employee.
23. Can the worker hire assistants paid by the worker? If not, the worker is likely an employee.
24. Can the contract be terminated at will by either party without further consequences? If so, the worker is likely an employee.
25. Can the worker suffer a loss as well as make a profit from the work? If no, the worker is likely an employee.