Independent Contractor or Employee?

Business Owners need to ask themselves FIVE specific questions in order to determine whether their Independent Contractors are actually Employees. The first question has to do with whether you have a permanent relationship or a project-by-project relationship. Will that person be working with you on a single project or indefinitely?

The second question has to do with whether you intend to exercise significant control over that person’s services. For example, do you plan to determine when, how and where that person works or are those decisions made by that person?

The third question has to do with making a substantial investment. Do you plan to make a substantial investment in that person’s training or buy specials materials or equipment or does that person bring those things to the job?

The fourth question has to do making an opportunity for profit or loss. Does that person only work for your company or do they work for others?

Finally, the fifth question has to do with skill sets and specificity. Does that person bring to the table a specific skill set or is it a situation where they can learn on the job?

If you’ve answered yes to any of those five questions, it’s likely that the person you’ve hired is actually an Employee and not an Independent Contractor.