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Employees vs. Independent Contractors: Differences and Misclassifications

Itzkowitz Law Admin July 27, 2021

Employers often ask us what are some of the key differences in defining a worker as an independent contractor or as an employee. There are several factors that are important in helping to determine that.. While there are many differences between independent contractors and employees, the most evident one if that an employer does not have the right to control or direct the means or method of accomplishing the work results, only the result of the work itself. In other words, the right to control is a crucial component when determining whether the employee is an independent contractor or an employee.

Some of the distinguishing factors are:

  • Whether the worker controls the hours of employment

  • Whether you supply the materials the worker uses or the worker brings them to the job

  • Whether the work is temporary or permanent

  • Whether the worker performs the same services for others

  • Whether you provide the worker with benefits

  • How much guidance you give the worker and the degree of control you exercise over the worker

Common law principles further define independent contractor status by means of compensation. If an individual is on an employer’s payroll and receives a steady paycheck, undoubtedly that person is an employee rather than an independent contractor. While an independent contractor is his or her own boss, work stays within the definitions of oral or written contract and adheres to certain requirements. An employee relies on the business for steady income, gives up elements of control and independence, is eligible for certain benefits and works within constraint of workplace.

As a business owner, it is extremely important to have a classification process that puts policies in place for hiring and managing your independent workforce. Misclassifying an employee as an independent contractor can lead to costly legal consequences that can be detrimental to your business.

If you are a business owner and have any questions regarding the classification of workers, contact Itzkowitz Law at (813) 461-6600.

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