Factors Indicating An Employee
- Detailed instructions are given by the
business on how the job is to be performed.
- A requirement exists that services be
performed personally and not assigned to an assistant.
- Assistants are hired and supervised at the
direction of the business.
- The person performing the service has a
continuing relationship with the business.
- The person performing the service is highly
integrated in the operations of the business.
- Hours are established by the business.
- Most of the worker's business time is
dedicated to one business.
- The business controls where the work is to be
done and pays based on time instead of completed jobs.
- The business pays much of the worker's
ancillary costs such as tools, travel, etc.
- The worker (or the business) has a right to
terminate the relationship without incurring contract performance liabilities.
Indicating An Independent Contractor Relationship
- The worker incurs some risk of financial loss
in the business relationship.
- The worker performs the service in question
for more than one firm.
- The worker receives "pre-employment"
training as opposed to training on the job.
- The worker can assign assistants to perform
the work at his or her own discretion.
Please keep in mind that the list above is not
"all-inclusive" and no one factor will usually determine the employer/contractor
ruling. Confusing? Certainly, but we can help guide you though some of the
issues whenever the need arises.
Congress recognized the complexity of
this issue and granted some "safe haven" relief in the Small Business Protection
Act of 1996. You may qualify if you have historically treated certain employee
groups as contractors and can meet the requirements under the Act.