Whether a worker is an employee or an independent contractor requires a fact-specific analysis of the worker’s job duties and the employers’ right to control the worker. The analysis seeks to determine whether the worker is economically dependent upon the company or is operating a separate business enterprise.
There is no single rule or test for determining whether an individual is an independent contractor or an employee. Different federal and state government agencies may apply different tests or factors under different laws. But the various tests will at least consider the worker’s actual duties, responsibilities and independence, not merely the worker’s title or classification applied by the company for which the worker provides services.
The employer generally bears the burden of proving an individual’s independent contractor status. The penalties for misclassification are often severe and can end up putting companies out of business. Therefore, it is imperative for the hiring party/potential employer to correctly identify whether a worker is an independent contractor or an employee.
The distinction between an employee and an independent contractor is an important distinction in a number of contexts including taxation, the applicability of laws designed to protect workers and the like....
Please call us at (312) 960-9400 if this is an error or if you have any questions.