Are You an Employee or an Independent Contractor?

The economic downturn has led some companies to cut payroll costs by illegally classifying workers as independent contractors rather than employees. 

If you work as an independent contractor you will have no workers’ compensation coverage if you are hurt on the job, unless you purchase your own coverage.

It can be a blurry line between being an employee or an independent contractor, but it is important to know which you are.

Here are some tips for determining your status to make sure you receive the benefits you deserve and to prevent yourself from being taken advantage of.

• How Many Companies Do You Work For? – A good indicator that you are an independent contractor is when the you do the same type of work for multiple companies.
• Is Your Employment Permanent?– If you are hired with the expectation that the job will be permanent, or until further notice, you are generally considered an employee.
• Are You Reimbursed for Expenses? – Independent contractors are more likely to have expenses that are not reimbursed by the company. But employees are generally reimbursed for business-related expenses.
• Do You Provide Your Own Workspace or Tools?– Independent contractors will usually have an office or work space, or tools, equipment, or supplies that they pay for themselves.
• How Often Are You Paid?– Independent contractors are typically paid by the job, while employees are paid by the hour, week, or month.
• Who Pays for Your Benefits? – Independent contractors typically do not get benefits from the company, while employees, if eligible, receive benefits such as insurance, pension plans, vacations, sick days, and workers’ compensation coverage.

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This blog provides general information. Do not mistake it for legal advice. Please read our disclaimer.

Tagged as: contractor, employee