Monday, October 3, 2011

Employee or Contractor? 5 Ways to (Legally) Tell the Difference

Employee or Contractor? 5 Ways to (Legally) Tell the Difference

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To help sort through the confusion, here are five characteristics of independent contractors, from lawyers and law firms on JD Supra:

1. Independent contractors “generally do not get … employee benefits, such as insurance, a pension plan, vacation pay, or sick pay.” (From He’s not my employee, he’s an independent contractor - or is he? by Fein, Such, Kahn & Shepard, P.C.)

2. Independent contractors “should not be working full-time at your business, using your equipment and supplies, and doing the same work as your W-2 employees.” (From Contractor or Employee? by Davis Wright Tremaine LLP)

3. Independent contractors require “a written agreement … specifying the nature of the relationship, including each party’s duties and responsibilities with respect to taxes.” (From Can You Withstand an Employment Tax Audit? by Ronald Adams)

4. Independent contractors “[are] retained for a speciļ¬c project, … have other clients, … [and] maintain independent activities.” (From There is no such thing as a “1099 employee” by the Law Office of Alexander J. Davie)

5. An independent contractor “purchases his tools, has a high degree of skill, can make or lose money based on how much time he invests in the job, works … without the customer’s direction, and is not integral to the business’ operations.” (From FedEx Driver Found to be Employee – Not Independent Contractor by Williams Kastner)

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