Mistake 1:Going by the written contract
Despite what the agreement with the individual worker provides, thenature of the work relationship between the company and the worker determines how he or she is classified. Some employers believe that having a written contract that provides for the independent contractor status supersedes all other considerations. This is untrue. If the “independent contractor” is doing the same type of work as someone else (who is classified as an employee and is issued a W2), the “independent contractor” is misclassified. If, however, the worker provides the same or similar services to other companies, they are more likely to be deemed an independent contractor.
Mistake 2: Allowing the Worker to Classify the Relationship
Even if the worker requests or even agrees to be treated as an independent contractor, this does not mean that it is appropriate, legal or ethical.
Mistake 3: Trying to Control When and How the Work Gets Completed
A key factor in considering whether a worker is an independent contractor or an employee is the amount of control over the details of the work being performed. If the relationship is intended to be long term and the company tells the worker how to complete the work, the worker is likely an employee, not an independent contractor. True independent contractors typically perform services for a brief period of time. True independent contractors are also typically given an objective and then are free to fulfill it using their own tools, methods and where and when they choose. Generally, if you tell your workers where to work, when to work or to perform the work in a specified manner, you have an employee, not an independent contractor.
Read the full story at Avoid These Common Mistakes in Classifying Workers | The National Law Review