Employee Issue:

Independent Contractors

Independent contractors perform work for companies, but are not considered employees. The relationship is usually created on an oral or written agreement between the contractor and the business. An independent contractor’s hiring company is not the employer, but the customer. These contractors can decide, where, when and how a project should be completed. Independent contractors must complete their assigned projects on time, according to the specifications in the agreement.

To determine who is an independent contractor, several factors must be reviewed including:

  • The extent to which the services rendered form a vital part of a business
  • The permanency of the business relationship
  • The degree and nature of control by each party
  • The worker’s opportunities for profit and loss
  • The amount the worker invests in equipment
  • The amount of creativity, initiative and foresight required for the work to succeed against competition

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