From Jackson & Lundell —
Tests on how an employee is classified can be tricky. The central theme in most of the tests, however, is control. While a generalization for illustration purposes only, if you have a certain amount of control over the worker that worker is deemed an employee. The less control one exhibits over the worker and how the worker performs his or her job, the less likely the worker is an employee.
Even more simplified, one may look to any evaluation system used in providing feedback to a worker. If an evaluation system measures the details of how the work is performed, then these factors would point to an employee. If the evaluation system measures just the end result, then this can point to either an independent contractor or an employee.
Other factors often considered when classifying a worker’s job include:
Who provides the tools necessary in performing the job,
The possibility of a profit or loss for the worker as a result of services rendered,
Whether the worker is required to work full time for the business,
Whether the manner of payment is by the hour, week or month; versus, payment on a commission or job basis.
Importantly, the factors discussed above are not exclusive and are considered in their totality – not by merely tallying how many factors imply one status or the other….
Read the full story at Are You An Employee Or Independent Contractor? [webpage no longer available]
- Employee vs. Independent Contractor: The Problem Of Employee Misclassification (civilrightsca.com)
- Don’t Misclassify Workers as Independent Contractors – The National Law Review (natlawreview.com)
- Independent Contractor? IRS Looks at 20 Factors (blogs.findlaw.com)