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Contact UsIndependent contractors are not employees. Instead, they negotiate an oral or written agreement with a business. The contract establishes the rate of pay, expectations, and specific standards or requirements. Businesses do not withhold taxes for independent contractors, and they are not covered by unemployment or workers’ compensation regulations. Independent contractors, while they have significantly more freedom than at-will employees, therefore do not receive many of the legal protections extended to employees. If you are considering becoming or hiring an independent contractor, you should contact an attorney with experience in employment law in order to learn and protect your legal rights.
Independent contractors have a large degree of control over how and when their project should be completed. The businesses they work for are their clients, not their employers. While the clients are able to specify the desired work outcome, the independent contractor is generally given free rein to determine how best to meet that outcome, as long as they meet the terms of the contract and complete their work on time. Independent contractors must also submit their own tax payments.
Federal law defines independent contractual relationships as measured by the independent contractor’s independence. There is no single legal test which determines whether a person is an independent contractor or an employee. The Supreme Court has measured several factors in past decisions, including:
- The relationship’s permanency.
- The importance of the services performed to the business.
- The worker’s opportunity for profit.
- The degree of independence, in organization and performance of duties.
- The ability of the worker to succeed in a free labor market.
- Whether the worker has invested in materials or equipment.
- The amount of control each party has over the relationship.
Other factors, such as payment, licensing, or even the presence of a formal contract, have been held less important. Therefore, a number of factors must be weighed before determining whether an individual is an employee or independent contractor. These factors make it vital that an individual or an employer with a question about independent contractor status consult with an attorney who has experience in employment law.