Telling the difference between an independent contractor and an employee can be a difficult task, but using the following checklists will help you to distinguish between the two.

Someone is more likely to be regarded as an employee and not an independent contractor if:

• you control where, when and how they work;
• they personally perform the work and do not sub-contract out their duties to anyone else;
• they are paid a regular salary or wage;
• you provide them with equipment and/or a uniform;
• you deduct tax from their payments
• they are given paid leave; or
• you engage them on an ongoing basis, rather than to perform a particular job.

On the other hand, someone is more likely to be regarded as an independent contractor and not an employee if:

• they do not work under supervision;
• they regularly provide services to a number of different employers;
• they are not given paid leave;
• you do not deduct any tax from their payments;
• you only paid them for the work they complete;
• they can sub-contract out their duties without seeking your permission; or
• they provide their own equipment.

If you are still unsure about whether someone you employ is an employee or an independent contractor, stay tuned for next week’s Bulletin. I’ll give you two questions you can ask yourself to be sure.

Regards,

Charles Power
Editor-in-Chief
Employment Law Practical Handbook

Tags: contractor, employee