What makes someone an independent contractor?

Employee classification is an important issue that can have a significant impact on a worker's rights and benefits. Under state and federal laws, the law uses a multi-factor test to determine whether a worker is an employee or an independent contractor. The factors include:

• The degree of control and supervision the employer exercises over the worker.

• The worker's opportunity for profit or loss.

• The worker's investment in equipment and materials.

• The worker's skill and expertise.

• The permanency of the relationship between the worker and the employer.

• The worker's right to terminate the relationship.

If a worker is classified as an employee, they are entitled to certain benefits, such as minimum wage, overtime pay, and workers' compensation. They are also entitled to certain rights, such as the right to file a complaint with the Equal Employment Opportunity Commission (EEOC) if they are discriminated against.

If a worker is classified as an independent contractor, they are not entitled to these benefits or rights. However, they are free to set their own hours and work for multiple companies.

Here are some additional tips for determining your employee classification:

• Consider the terms of your contract. If you have a written contract with your employer, it may specify whether you are an employee or an independent contractor.

• Look at the way you are treated by your employer. If your employer sets your hours, tells you what to do, and provides you with equipment and supplies, you are likely an employee.

• Consider the nature of your work. If your work is integral to your employer's business, you are likely an employee.

• Factor whether the worker has an LLC or other entity he or she bills through. If so, this may support a finding of independent contractor status.

If you are not sure whether you, or your employees, are classified correctly, it is important to speak with an employment attorney. They can help you understand the law and your rights.

The best time to fix or clarify independent contractor v. employees status is before there is a dispute. But even when there is a dispute, speaking with an attorney can help protect your, or your company’s, rights.

It is important to remember that the law on employee classification can be complex. It is also in a state of fluctuation right now with political parties on both sides advocating for major changes. If you have any questions, you should speak with an employment attorney.