Properly Classifying an Independent Contractor (Self-Employed) versus Employee?

Jason T Brown

Written by  Pro

Employment / Labor Attorney

Contributor Level 13

Posted about 3 years ago. 1 helpful vote

Email

1

Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?

The more the company commands of the worker the more likely it is an employment relationship. Certain criteria to look for is the company dicating hours, location, tools, uniform, how to complete the tasks and reserving the right to discipline and review the worker. Percentage of time spent at that one company and the ability to work with other companies will also be considered

2

Financial: Are the business aspects of the worker's job controlled by the payer?

These include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.

3

Type of Relationship: Are there written contracts or employee type benefits

Is there a pension plan, insurance, vacation pay, etc.? Will the relationship continue and is the work performed a key aspect of the business?

4

Weighing the Criteria

There is generally no black and white - only shades of grey. Either side can make colorable arguments. You need to consider the extent of control the company has over its worker and somehow try to objectively consider how it will be viewed by the Courts and also the IRS. The more controlling and intimate, the more likely it will be held to be an employer/employee relationship.

Additional Resources

http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

Rate this guide

Related Questions

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

27,358 answers this week

2,866 attorneys answering