As an employer, it is important to determine if individuals working for you are employees or independent contractors. If you mistakenly classify an employee as an independent contractor, there may be significant monetary penalties. Some factors of many are listed below. It is always advisable to contact an attorney if you are unsure.
- The major factor in determining whether a worker is considered an employee versus an independent contractor is the employer’s right to control the employee’s manner and method of performing the work.
- The kind of work and whether the work is done under supervision. When the worker only performs certain specialized tasks and those tasks are completed without the supervision of the employer, it is a factor indicating independent contractor status.
- When the worker supplies his or her own tools and the employer does not provide a place to work, the worker’s status leans towards that of an independent contractor.
- The length of time the person is employed. An independent contractor typically is employed only for a limited amount of time and only for purposes of completing a certain task or job.
- Whether the method of payment is by time or by the job. An independent contractor is normally paid by the job.
- Whether the work is part of the regular business of the employer. If the worker is hired to perform a task that is not part of the employer’s usual business, it may indicate independent contractor status.