CALL FOR A CONSULTATION (415) 909-3945

What makes an independent contractor different from an employee?

Click for a consultation
Posted by Legal Team On October 2, 2019

How do you know you’re an independent contractor and not an employee? (If your answer is, “Because my boss told me so,” you may want to keep reading.)

The “gig economy” is very popular right now in America, partially because it allows people to work a schedule that suits them best. You can, for example, drive for Lyft or Uber when it works best for you — which makes it ideal if you need to work around your child’s school schedule or your primary job.

Gig work is also popular with employers. They can enhance the range of abilities in their staff by hiring outsiders who bring in a lot of expertise without making a long-term hiring commitment and without worrying about pesky tasks like “withholding taxes.”

However, you aren’t an independent contractor just because that’s what it says on the forms you sign when you start work. According to the Internal Revenue Service (IRS), the difference between an independent contractor and an employee has more to do with the totality of the relationship between the worker and the employer than anything else.

Generally speaking, the more an employer controls your work — including how you do it, when you do it, whether not you’re free to work elsewhere and if you can hire your own subcontractors — the more likely it is that you’re an employee. If you’re bringing a skilled trade to the table and you can set your own hours, name your fee and generally are free to work without much oversight or instruction, you’re probably an independent contractor.

The distinction is important because independent contractors may enjoy certain freedoms that employees don’t have. However, they also lack significant employee rights. For example, an independent contractor can’t obtain health benefits, unemployment, workers’ compensation or overtime, but an employee can.

Are you suspicious that your employer has deliberately mislabeled you as an independent contractor, thereby depriving you of your rights as an employee? If so, it might be time to talk to an attorney about your options.

|