Employee or Independent Contractor
Please select from an Employers category below to get more help.
null Employee or Independent Contractor
An employer-employee relationship exists when a person who hires an individual to perform services has the right to exercise control over the manner and means by which the individual performs his or her services. The right of control, whether or not exercised, is the most important factor in determining the relationship. The right to discharge a worker at will and without cause is strong evidence of the right of direction and control. Among other considerations:
- Whether the one performing the services makes the services available to the general public.
- Whether the principal or the person providing the services supplies the tools, equipment and place of work for the person doing the work.
- The length of time for which the services are performed to determine whether the performance is an isolated event or continuous in nature.
- The method of payment, whether by time, a piece rate or by the job.
- Whether or not the work is part of the regular business of the principal.
- The extent of actual control exercised by the principal over the manner and means of performing the services.
- Whether the worker can make business decisions that would enable him or her to earn a profit or incur a financial loss. Investment of the worker's time is not sufficient to show a risk of loss.
- A written contract that claims to create the relationship of principal and independent contractor is not controlling if the practice of the parties shows that the principal retains the right of control under the common law test.
A strong indication of employment is when the work being done is an integral part of the regular business of the employer and the work is performed at the place of business. If you are unsure as to whether your workers are employees or independent contractors, see our handbook or e-mail us.
You also may want to review the information on worker misclassification.