Are You an Employee or Contractor?

This is a long running problem, especially for small business. I have written extensively on the subject in the past from practical experience.

The subject has become trickier, as the courts are more vague and tort lawyers have been given more leeway by judges and juries who know ever-less about business.

The rule of thumb for business is this: Basically, if you control how a worker performs, he or she is an employee, not a contractor. Tell the hired person how and when to report to work and you have an employee, not a contractor. Also, when you provide tools for the work, you have an employee.

Tricky vagueness comes about when a question arises as to how important the job is to an employer’s business. You can be a genuine contractor by all conventional definitions and still be considered by some courts an employee of a business. Sharp lawyers come in to help make a complaint against the boss and trouble then starts.

Remember, many newly hired want to escape employee taxes just as much as employers do, and prefer being contractors. Until they are no longer working and seek unemployment insurance. Then they complain they never were independent contractors but really employees, after all.

Contractors do not get unemployment checks