Employee or Independent Contractor?

The Department of Labor issued guidance on the difference between an employee and an independent contractor. Despite the information available to the public, many businesses are treating individuals as contractors instead of employees.

Behavioral

The Law uses a few tests to determine if an individual is an employee or an independent contractor. One of the parameters used, is determining whether or not the company controls how and what a worker must do. The control doesn't necessarily mean directing how the work is done but determining if the employer can control how the work is being completed. When the employer is instructing what equipment to use, and where to do the work, this indicates that the company wants the work done a certain way.

Financial

Do you decide when the worker is paid, how they are paid, and for how many hours the worker is paid for? If you control the aspects of when and how they get paid, it might be safe to assume that this worker might be an employee. Is the worker sending you an invoice for payment? This might be another consideration to take think about. Though most contractors are paid after an invoice is sent, companies like Uber typically consider their drivers as independent contractors. On the contrary, a delivery driver for a fast-food company can be considered an employee.

Type of Relationship

The responsibility falls on the company to examine this company-worker relationship and determine if the individual must be considered an employee. Though there is no cookie-cutter, answer for each situation, employers must document their decisions for how each worker is classified. When in doubt, consider treating a worker as an employee.