Employee vs. Independent Contractor: Differences You Need to Know

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So you're so happy you just got hired, but the person you're working for just called you a name: "independent contractor." Now what does that mean? What kind of a business relationship is that? Can you come to the company picnic? What does this mean for you?

While an "independent contractor" is different from a standard employee, the exact definition of your role is not set in stone. To prevent any unwanted surprises, it is essential to define the exact business relationship between you and your employer prior to beginning work.

What is an independent contractor?

We can look in three different places when answering this question. A sometimes difficult status to define, what makes an independent contractor has been outlined by common law principles, the Fair Labor Standards Act, and finally the decisions of some courts.

The IRS and many states have adopted common law principles to define an independent contractor. These rules focus primarily on the level of control an employer has over a service or product, meaning, whether or not the employer actually defines what is being done and how it will be accomplished.

Common law principles further define independent contractor status by method of compensation. If a person is on an employer's payroll and receives a steady paycheck, clearly that the person is an employee rather than an independent contractor, who likely receives payment in a different manner. Other considerations when identifying someone as an independent contractor may include:

  • If the worker supplies his or her own equipment, materials and tools
  • If all necessary materials are not supplied by the employer
  • If the worker can be discharged at anytime and can choose whether or not to come to work without fear of losing employment
  • If the worker control the hours of employment thus indicating they are acting as an independent contractor
  • Whether the work is temporary or permanent

Again, the nature of the work will help define the relationship. When work is considered integral to the business, it is more likely that the person is an employee. On the other hand, work that is temporary and non integral may imply independent contractor status.

In an attempt to interpret provisions of the Fair Labor Standards Act and discern between employee and independent contractor status, some courts and federal agencies have come up with the "economic realities test." It looks at the dependence of the worker on the business for which he or she works. If a person gains a large portion of their salary from that business, chances are that person qualifies as an employee. The test also factors in such things as level of skill, integral nature of the work, intent of the parties and payment of social security taxes and benefits.

Outside of the Fair Labor Standards Act, courts ask the following questions to determine work relationship in addition to both an economic and an agency test:

  • What is the degree of control over work and who exercises that control?
  • What is each party's level of loss in the relationship?
  • Who has paid for materials, supplies and/or equipment?
  • What type of skill is required for work?
  • Is there a degree of permanence?
  • Is the worker an integral part of the business?

These courts also use the "right to control" test. When the hiring party controls the way work is carried out and a product is delivered, the relationship between the parties is employer/employee. If an employer does not have authority over how a party accomplishes his or her work but simply give requests an outline, the relationship between the parties is that of hiring party/independent contractor.

Employer Tax Liability

An employer's tax liability is determined by the worker's employment status. When a worker is an employee, employers must pay state and federal unemployment tax, social security tax and workers compensation/disability premiums to a State Insurance Fund. When a worker is an independent contractor, the hiring party is not required to make any of these payments.

Should employers incorrectly define a worker as an independent contractor, they may find themselves liable for past taxes including FICA and federal unemployment tax. Safe harbors which allow employers to use the independent contractor status and avoid penalties include: prior practice of treating similar employees as independent contractors and the existence of a prior IRS audit where no taxes were required to be paid.

Conclusion

Certain factors will define a worker as an independent contractor in every case: not relying on the business as the sole source of income, working at his or her pace as defined by an agreement, being ineligible for employer provided benefits and retaining a degree of control and independence. While the 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, on the other hand, 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.

Comments

good stuff

I am an independent contractor who drives his own truck
I have been in the union under contract since 1998 with a trucking co. in n.j.We have new mangement and they are saying as an independent contractor it is illegal for me to be in the union and our teamster contract is void and refuses to negociate with us. is it illegeal and is the union wrong in having a contract between independent contractors and a company and is the company responsable for any taxes we dont pay state or federal?

Please help us withsome answers or where to go with this.

shop steward
Joe D

Joe D is clearly an employee because:

1.He has been working for the truck company for 12 years.

2. The Union is for employees only and can not represent independent contractors, if joe hires employees then the employees can be in the union if they vote for it. Independent contractors are managing themselves, unions can not represent management.

3. The truck company will be fined and they are completely responsible for all the employee taxes, fines or fees for Joe d. The truck company knows better.

4. The feds have no case against the union, because joe d is an employee. The union made no error and its pension fund is safe from the feds in this case.

If Joe could prove he was an independent contractor with his own company then Joe should file a lawsuit against the federal government on the basis of the right to equal justice: example, the day our government loaned monies to private companies (auto companies, banks)for bail out this act violated our governments own laws that are now being applied to Joe in this case. example if Joe owned his own company then if he was going broke could he get the same bail out money? NO. Joe would have to file a bankruptcy. The private companies should of filed for bankruptcy just like everyone else. Joe would have an excellent case because our own government has enforced our laws on all of its citizens for 3 centuries now when it comes to certain friends (GMC, insurance groups, stock companies)they were all given money, and exempted from the same Laws that are now being enforced against Joe? very sad. The problem is joe is an uneducated truck driver and clearly does not have the funds to sue his government. very sad.

5. just by having management that can make decisions over joe, proves joe is just an employee.

Today (7/20/2010) while trying to reopen my unemployment claim, my local IDES (Illinois) office told me I am now considered an employee of the company I’ve been doing some freelance/independent contractor work for (I’ll call them company B) while receiving unemployment pay.

I was laid off from company A early December 2009 and have been collecting unemployment. While looking for a job, I was approached by company B in January 2010 to do some freelance design/illustration work. A friend of mine at company A mentioned to someone at company B that I was out of work and might be interested in some freelance work during my continued search for full time employment.

I have done about 37 days of work (some days a couple hours, some a full day) for company B since January 2010. I have always reported every penny I earned while “certifying” via telephone biweekly as required. When I made above the IDES limit in a week, I received less unemployment pay. About 3 times in 2010 I made enough during a week to “knock me out” of unemployment. When this happened, I waited until the freelance project was over and then went back to the local IDES office to reopen my claim. All this while conducting my permanent full time job search.

When I do work for company B (located in Ohio) I work out of my home office, the same one I use to perform my everyday job search tasks. I really do not know if company B will ever call me again to do another project. I always do, however, try to do the best job possible while using all professional standards in hopes that company B will call me again. I guess I would be thrilled if company B gave me so much work that I never need to receive unemployment again! Actually, my goal is to have a full time position as an employee at some company as soon as possible. Company B contacts me (and I have solicited them a few times) when they have a project and I have full freedom to accept or deny the project. I do think if I kept turning down projects, company B would not call me anymore. My local IDES office said that constitutes me as being an employee of company B. I set my own prices. I base my prices on a range I assume to be competitive with other freelancers. When I told my local IDES office that I fear I might not be considered for more projects from company B if I charge too much (gray area what ‘too much” is), they said “ah ha” that makes me an employee. I was also told that if company B sets a deadline, that makes me an employee of theirs. I’m confused here because I don’t know who would ever give out a project without a timeframe of some sort. If company B gives me a timeframe they need the work completed in (perhaps a design/drawing for one of their presentation dates), I alone decide if I can make that work. If I decide I can’t, I decline the project. I was also told by IDES that if the person at company B directs the project and has me make revisions, that he is considered my “supervisor” and that I am an employee. I am shocked if all this is fact. I do not consider myself an employee of company B in any regard. According to this IDES office, this freelance work along with me being on unemployment, deems me an employee and NOT an independent contractor.

I am under no retainer or contract with company B of any kind. Company B does not withhold any taxes or social security from any payment made to me. Company B will issue a 1099 form for any work I performed in 2010. My local IDES office said this company B is taking advantage by not paying taxes, etc.... and that they know just what they are doing. I was asked to fill out a questionnaire to determine if I am an employee of company B. When I was told I was in fact now an employee of company B, it was also indicated that a report will be made and IDES/IRS will contact company B for any penalties.... including any and all other cases similar to mine. I asked my local IDES office to not accept my papers today and not to reopen my unemployment claim today. This was granted. Certainly, company B would immediately wash their hands of me with such inquiry by the government... weather right or wrong.

My local IDES office also told me I have not been working for company B as an independent contractor, but as an employee. I’m confused because I was a freelancer/independent contractor/sole proprietor of my illustration/design company using my name for many years prior to my employee position at company A. During that time, I paid my own estimated taxes, etc. and used my social security as my tax ID# as directed by my accountants (some do it that sole proprietor way, some set up a company with it’s own tax ID#).

The creative field is big on freelancers. It is somewhat difficult to find full time employment positions. I am determined to find one of these positions. The unemployment checks have been invaluable to my family while I continue to turn over every stone to find a job. I really thought taking a freelance job here and there would be the right thing to do, even when it temporarily bumped me down, or out, of unemployment payments.

I feel I’m in a catch 22. Forget company B and freelance work to receive unemployment during my job search... or forgo unemployment to accept any possible work that MIGHT arise from company B while searching for a permanent fulltime job. Company B work may or may not continue, and overall has not been even close to my unemployment pay. If I try to continue with unemployment AND company B, IDES/IRS will go after company B. For that, employee or not, in the end company B will see me as the enemy and all opportunity lost.

I read that all states allow workers already on unemployment to reopen an unemployment claim at the end of a temporary job or freelance job (that temporarily knocks them out of receiving compensation due to earning too much wages). I really thought I was doing everything by the book, not hiding a thing!

hi everyone

I am working for a driver training organisation. we, on a continuous basis, request services of individuals to provide training to our learners. For instance, one person might work for 4-5 days a week providing training. we pay on services-rendered basis and these people are put on renewable contracts provided their services are still required. As a result we regard them as independent contractors and not employees as their contracts state clearly that they are not employees of the company.

Is this, in any way, in breach of the law?
Please assist.

Hi there, and thanks for such a great inquiry. We wish we could help, but our specialty is legal documents, not legal advice. We can, however, help you find a lawyer to answer your questions. Check out our attorney referral network: http://attorneyconnect.legalzoom.com

Hello -

I was basically retired for a few years after and then approached by a start-up magazine to write a monthly social column which was to be writing a "few hundred words" about "a few social events" I attended in the community each month. This was to be paid at a certain set fee with no taxes taken out. I was given a company email along with all the other's on staff, a name company name tag and company business cards and listed as a regular writer (not a contributing writer) in each monthly magazine issue. I was expected and asked to develop relationships with community leaders, provided sales leads and talent for magazine covers. The "few events" turned into up to 30 per month and the "few hundred words" turned into a few thousand. Also, additional features articles were made out of the work I turned in. None of this additional work was compensated, even when requested. I was also asked to sign a non compete clause stating I would not work for any other publication in central part of Florida. This tied my hands to do other work with the time constraints, and non compete clause and this was my only source of employment. After numerous requests for reimbursement, even a willingness to take on more responsibilities, they seemed to realize they were doing something wrong and dropped my column. I was probably paid for 25% of the actual work I produced. What actions can I now take? (aside from kicking myself for being so trusting of deceptive people).

Thank you for any input

Hi Lin, thanks for your question. We are sorry to hear of the situation you are facing. Do keep in mind that we are not a law firm and cannot advise you on what steps you need to take. However, an attorney may be able to assist you with this matter. Please visit http://attorneyconnect.legalzoom.com to search for an attorney in your area.

I am an editor and scheduler for a mystery shopping company as an independent contractor. This company is virtual, so we all work from home. I have been there for eight years. I get paid by the edit and or schedule but the company has training on how to edit and a timeline on when to finish. Also the relationship between the schedulers and editors are permenant in nature. The company does have employees in upper management, but has made comments in the past that she likes to keep the employee count below 10 so as to avoid certain lawsuits. In my opinion from what I have read, we should be classified as employees, and this company is getting away without paying state, federal and workers comp taxes. What is your opinion?

Hello, this is a really great question. However because we are not a law firm we can't give any advice or express our opinion regarding this matter. An attorney may be able to give you some direction regarding this matter. Feel free to refer to http://attorneyconnect.legalzoom.com to search for an affordable attorney to assist you.

Re a non-profit. We have several 1099 contractors who provide services and pay their own taxes. Is there a legal form we can use (in California) that will ensure they are not recategorized by the IRS?

Am I an employee or 1099? I am a Physical Therapist Assistant and had been on a 13 week assignment. The contract eneded and the company I was working as a 1099 contractor. This company finds the jobs for me, works out the time and hours and I submit my hours to them on their weekly payroll. Any issues with the contract or renewals are arranged by them. This company is a staffing agency. The company will contract me and tell me about any work available as I only work weekends at one place and the rest of the week is up to me. The company contact me about a 'need' and asks if I am interested, info about how many days, pay rate. I have no contact as such with the work. I am instructed as to who, what, where and submit my time and get paid. Am I a 1099?

Our company places PTAs on contract assignments similar to teh way you work for the staffing agencies you described. We have other PTAs interested in doing the same thing. I have always been under the impression that some occupations are eligible ffor independent contractor work and some are not. PTs do not require direction and supervision by anyone, but PTAs require direction and supervision by a PT. For that reason, I was not sure whether PTAs could, in the eyes of the IRS qualify as legitimate independent contractors. What did you learn about your eligibility to work as an independent contractor?

Starting in late July I delivered newspapers for Wandel Distributors in Annapolis, Maryland.I was told by the owner that I would earn around $400 per week as an independent contractor. The most I ever earned was $307 and change. I was told when , where and how to deliver the papers. On the morning of September 13,2010 my car broke down right after I finished my route. I also misplaced my cell phone. That afternoon I called my supervisor and told him I could not deliver papers the next morning. I found my cell phone the next day and told my supervisor that I still didn't have a vehicle for the next morning. A friend loaned me his vehicle so I was available for Thursday, September 16. I received a text message from the owner of the business that he had terminated me and that I should have known that back-up vehicles were available. This was never communicated to me verbally or in writing. I was never paid for the last ten mornings I worked. The owner stated in a text message that I owed him money for penalties incurred from this situation. In calculating what I earned and factoring in automobile expenses I earned significantly less than minimum wages. What Wandel is engaging in is a form of legalized slavery. I do not believe that I really fit the definition of indepent contractor.

I worked for Wandel Distributors as well and just recently ended my job with them earlier this month. They told me that I would be making $300 per week and turns out I only made half of that. After putting gas in my truck everyday I only made about $50 a week. After 3 weeks of working there I received my regular paycheck and asked why I was only making half of what was first told to me and they replied saying that I was only doing half the route. What?! I was never informed that I wasn't doing a whole route or there was an extension of my route until then. This company is absolutely ridiculous. I gave my 2 week notice only to receive my last paychecks because I was told that if 2 weeks was not given I would not receive my pay. I definately do not recommend this job to anyone unless you want crap for pay, wanted to be constantly misinformed and you have a crap car thats good on gas. How can a so called "company" treat their employees this way and get away with it...ridiculous!

I just finished working with Wandell this morning after 3 weeks of false complaints. Will you please contact me in reference to our so called breech of contract.

id like to be a driver i have a truck..

Lets say I'm a doctor and I work for an private health clinic. I'm working under a professional service contract, but they provide me with and office and all materials and equipment necessary to do my job. I have no control over the clinic's decisions and they want me to be there at an specific time in the morning every day. Also I have to comply with orders that in some way affect my way of doing my job (like I can't make prescriptions of an specific medicine and how much time I should spend with a patient). I know a doctor classifies under the Professional definition under the Puerto Rico Labor Laws. But at the same time I feel more like an employee than a contractor. Its not clear to me, can you help me clarify this dilemma?

lets say i bought a truck and hired someone to drive it as a independent contractor,he drives my truck ,it is leased on to another company,I do not tell him how to do his job he gets his plans and goes from there,he supplys all othere material he needs to do his job,I do not tell him were to go and how to do it,I take care of the paper work that needs my attenion and i pay him cash for the weeks he drives.He is paid by a 1099 at the end of the year,i consider this a independent contractor woul you?

Yes

Hi,
I am, was, a housemom at a strip club here in Las Vegas. I as well as the dancers are independant contractors. Thedancers are under contract with the club and one of the clauses states the dancer shall pay housemom a minimum of $5.00 a night. Should these dancers not pay can I the housemom sue either the club or the dancers/ I ask because I have records and the girls owe about $6,000.00 total to date.

This is a great question for an attorney. Every Friday, attorney Joe Escalante answers legal questions for free on the LegalZoom Facebook page. Or you can sign up for our Business Advantage Pro membership for a low monthly fee, which includes attorney advice and consultation on an unlimited number of new legal matters.

I work as an independent contractor for a transportation broker in IN. I'm leased to them or their subsidiary. I am hauling under their authority, their IFTA and trailer. They have notified me that if I want to remain hauling on the route that I'm on, I will need to buy my own trailer and secure my own hauling authority as they are liquidating their equipment and dropping their hauling authority. They plan on remaining the Broker.

They are using methods of badgering and intimidation. When I ask for a contract, I get double talk, stories and a change of subject. Other drivers have succumbed to their intimidation and are not happy with the new provisions in their contract IE. Monthly settlement instead of weekly; different fuel surcharge formula; no detention or dock pay.

When I try to discuss these issues it's "Their Way or the Highway"

Do they need to notify me in writing of these changes? Do they have to provide me with a contract up front for my review?

Hi Timo, we are sorry to hear of the situation you are facing. Just a reminder: LegalZoom makes it easy and affordable to create your own legal document, but we don't give specific legal advice. We can help you find an attorney with our attorney referral network: http://attorneyconnect.legalzoom.com

Hi I take care of an elderly person-live-in, 5 days a week.The family pays me weekly by her checking account. They don't take any taxes out.Am I considered self employed or independent contractor? If I am self- employed, will they have to start taking out taxes and such?Their previous caretaker was an independent so what should I do? Thanks for your help.

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My daughter is a hairdresser and works in a local salon. The owner has set her days and hours and she gets one hour for lunch. She is required to be there even if she doesn't have anyone scheduled and she is required to do laundry or take out trash when she doesn't have a client. She has to buy her own tools but does not pay booth rent. The owner does not take taxes out of her pay and says she is self-employed and recommends she keep out 30% of her pay for taxes. Is this legal? Thank you for your help.

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We work under an "independent contractor" contract with a publishing company that sells advertising for RV parks, marinas and Chamber of commerce site maps. We are given parks to sell and are given guidelines for the price of the ads. We use our own transportation and buy all of our supplies except for the contracts. We are also operating under a "do not compete" contract if we are fired or whatever the owner of the company decides to do, we cannot work for another advertising company for 2 years thus taking away any parks that we have a rapport with and it reverts back to the owner of the company. We pay our own taxes and pay our own expenses. What are we?

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Can an individual be an exempt employee (receive pay & benefits) AND receive compensation as an IC (W9, no taxes withheld)?

Finally, an article that answers ALL my questions.

I have been an independent contractor in disguise for years now - it's a clever way for businesses to avoid paying taxes and benefits but still have control over what I do and when I do it!

When I was considered an employee, I looked forward to tax time - always getting a refund. Since being an IC, I dred tax time - I owe ALOT (twice as much) every year!

I feel like filing suits against them all......

I was hired as an a lease purchase independant contractor for a trucking company which during orientation pushed like you wouldnt beleive to quite. finally fired on the last day I was told by my attorney their are no laws to protect me but when I look at employee vs contractor its only obvious that the company is coverining themself in taxes what can i do

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I work as an independant door installer in Illinois for a company based in MN. They do installs for a major hardware store. They hire us as independants to install these doors they have a contract with. They schedule my work and tell me where and when I have to be somewhere. I only have contact with the company. I am not allowed to call the customer or store about the order. They send me a sheet of where I must be the night before to my fax machine. I use my own truck and tools. AM I considered an employee due benefits? I feel like I am getting the cheap end of the stick here.

my employer says I am in independent contractor but I am on payroll (direct deposit) and all federal and state taxes are taken out of my check. However, they do not give me sick or vacation time, and no health insurance, like the other employees... is this illegal?

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Can independent contractors participate in company benefits? If company is paying for true independent contractor's benefits, do the amounts paid by the company need to be included on the contractor's 1099 at the end of the year?

I believe that I am an IC, as I filled out the appropriate paperwork at the beginning. Our company has stated time and time again that we are IC's. I have taken two assignments with them and been paid for them. The company requires strict adherence to the way our assignments are performed but we have the right to turn down work if we choose without any repercussions. The company I work for is a national organization that is just getting started.
My question is this. Last week our employer announced through the monthly conference call that they are now going to start charging all of us an $18 monthly fee to upload the assignments to the company web site each month. If we do not work in a month, the fee is not taken out. They say the fee is to help jumpstart the funds necessary to promote/secure new projects that we can work on more steadily.
Is this legal to take a fee from an IC's paycheck without a written authorization from us and no forewarning? Does an IC have any recourse in a situation like this?

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My husband has been given a "voluntary early retirement" at his job with a years severance pay. His supervisor told him that if things did not go accorinding to plan, they may re-hire him but as a 1099 worker. Does the company have to wait one year before re-hiring him as a 1099 worker?

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I am working as a team member / sales for an insurance company since may i have an office i go to everyday and set hours , my employer hired me on 1099 and i am wanting to find out if thats correct? and if not what do i do?

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I was an independent contractor (1099's) who recently got terminated for accusations that are not true! I have no desire to work for that company EVER again! The company I worked for is withholding my funds ($530) because they are afraid the customer "might dispute the charge!" it was a credit card sale. Can I get a link or any information on whether or not the company has the right to withhold my funds? I don't feel this is legal! How would I even know if the funds were disputed? At this point, I believe they would outright lie (like they did with the accusations) and tell me the charge was disputed. The customer, whom I know personally, says they will not dispute the charge. Please help! The company I worked for is located a few states away and I cannot afford to drive all the way there and not receive my money!!! Thank you!

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I work for a cable contracting company as a "W-2 employee" however I use my own truck/fuel also all related tools were also supplied by me. I am forced to use my own cell phone to call dispatch and my own Internet service to do related office duties.

Is this legal? I am functioning my more as a independent contractor cost wise along with dictating my own hours ect. The ONLY "employee" aspect I see is weekly deductions for taxes.

Is this legal in IL?

My husband works for a company the pay him salary on a w-4 and they pay him on a 1099 misc rental for using his own truck
they pay for gas and tools and tires. how do i report this as a 1099 or self employed ??

I work as a tutor for an educational company and have a set class schedule with flexible tutoring hours that I arrange on my own. I supply all learning materials and the employer supplies the physical space, chairs, etc. Am I considered an independent contractor or employee? Can I receive payment through my dba and report it as additional income?

I have been working for someone for the past 5 years and never new the laws about contract labor. I live in Texas and need to find out if I've been getting messed around. The person I work for supplies everything, has me showing up at 7am every day, I use his tools, he directs what to do and I work at his property allot of the times. He has never contributed to paying anything to the government and I have been paying all the taxes and anything else including all doctor bills from getting hurt. Am I concidered a contractor or an employee? If I'm really concidered an employee--what about all the taxex I've paid and owe? I feel like I was duped and am confused about why he has been doing this to me. Thank you for your concern, Michael D.

I have been working as an independent contractor for a company in Florida and have a signed agreement by the company that they will pay me for services rendered 10 days from my invoice. So far they have paid 30 days late for my first invoice. Every time I ask or call there is an excuse. With 5 outstanding invoices what do you suggest I do in order to get paid?

I was hired away from a company with the offer of a salary increase and higher commissions to publish a magazine. They sent out a press release saying they hired me. I was working out of my home. After 7 month he changed me to contractor. I've been working for him for six years. I was paid my salary and commission for 3 years after being made a contractor. When the economy took a downward turn he let some people go. The owner started having me typeset ads for the magazine and in other markets that weren't my magazine. He started calling me 6-7 times per day to be sure I was making sales appointments to promote his website. He insisted on going on all these calls with me. He started asking me to post news on his website. He asked me to post jobs on his website. I performed my services in his name. I have never had a contracting business to this day. Does anyone know what constitues "direction and control"? He seems to think it's only asking me to work certain hours. I think him asking me to do all these extra duties and going on sales calls is direction and control. I have never had a written contract. Lately I would put out a magazine and work all month and would not be paid at all. After he got behind 4 months he said he sold the company and he's now the COO getting $120,000 per year and he was giving me some stock. It's restricted and can't be sold. Now he's trying to tell me that the stock is in lieu of those wages even though that was never discussed or agree to. My contract seems to be to do whatever he says and accept whatever payment he chooses to give me.

I am a truck driver. I work for a guy that has a couple trucks.my question is this. Ive heard that it is illegal to 1099 truck drivers in the staye of california.is there any truth to this. Thanks for your time.

How about in entertainment? There are so many companies out there. If music/dj company has a number of dj's and the dj's don't own the equipment, all bookings have to go through the owner, all gigs set for the dj's are set by the owner, the owner tells the dj's how to run the equipment, and are required to pick up and drop the equipment to what the owner sets, and also sets the pay rates for the dj's, etc, etc are they employees? And if so, is this still true if the owner of the company pays the employees with cash and doesn't provide benefits? So is the status of the DJ, in this case, an independent contractor because the owner isn't physically there when they do a show for the owner? Or are they an employee because they have to follow the rules, schedules, times, places, use of equipment accordingly. And the owner? What's that status? Since he's an owner that would make him an independent contractor? And if both are independent contractors- then independent contractors can have independent contractors? Just wondering.

If you have worked for a company for 3 years---after that amount of timeframe is it right for the owner to require you to sign a independent contractor agreement form?

I was employed by a lady that paid me a straight amount every week. She said that I was hired on as an independant contractor but I was there doing office work everyday. There was weeks I would work monday-sunday from 8am to 7pm if not later. She would yell and scream and throw things if the work was not getting done right so I quit and now she refuses to pay me for the three day's I am owed. Is there anything I can do to get my pay?

can a contractor hold a payroll check for thirty days after giving him more than a 2 week notice?

Yes, if that is when your regular paid day is. When you quit they dont have to give you your check right away as with a layoff or fire, they only have to print it the next scheduled day of pay (with everyone else)

I am supposed to be an independent contract. However, the person in charge (its pet sitting work) lists the ways we can contact them or anybody else, certain rules on timelines, to the point of how we do everything. To me this is being a possible employee. Where is the fine line?

Can you buy a independant contractor business cards with your company name, but with their name on it?

I have been working for a private practice for almost two years, I am being let go as tomorrow due to lack of work. She has me down as "independent contractor" but has always set my hours of when I am to be in the office and how I do my work, with that being said, in the state of NC can I quailfy for unemployment benefits?

In 2007 I started working part-time, just a few hours as an Independent Contractor to provide my services to search for and acquire new accounts, get their orders, and send that information to my client, follow up with those existing account to up sell and take any reorders, not realizing that I am expected to be the sole manager of all accounts. After leaving my full-time job in 2009, I was able to spend more time in providing work for my client, and in 2010 was told that I have to acquire 60 new accounts annually, while also continuing being the point person and managing all of my other accounts and if she (my client) feels that I am not calling the account sas often as she prefers, she wants to take them from me and give to one of her employees, I told her that being directed on how to manage my accounts , required to submit daily reports, and provide ongoing services that are a key aspect of the business on a permanent basis it seems I have become an employee, even though I am working out of my home. She strongly disagrees.

Hi Teresa! Thanks for contacting LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding this situation. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.

I was told I had to sign a non compete before I was hired on as independent contractor. When I was signed on they had no customers or cliets. I came in with the customers and they could not fill my customers orders.

They over promised and could not deliever. I never even recieved one single check from them. Can I be held to that contract?

It was their computer, they paid for my to fly out and meet them, hotels, food, and such.

I sent their computer back with in 24 hrs.
They also asked my to tap into my customers history from my last employer, and I didn't feel that was the right thing to do. When this guy got upset becasue I refused to do that , I quite.

Am I still held to the non compete?

Thanks

Hi Deborah-- Thanks for contacting LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding this situation. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.

I understand you can not give legal advice. I work as an independent contractor physician. The Contracting company pays me a monthly salary to provide service to a specific hospital where they have a contract to have a physician present every day.My company says I can schedule a day off, so long as I give them sufficient notice, but they also deduct 1.5x what they pay me on a per diem calculation as "the cost of hiring a replacement." Has anyone heard of paying more to get a day off then you earn when working? Especially if they want 365d/yr?

Thanks for contacting LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding this situation. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.

I was hired by a 501 (c)3 organization as a
Part-Time Arts & Crafts Artist to design an after-school curriculum with a prescribed salary. I am required to submit a time sheet at the end of each month. At this point, I have not been paid for December 2011. I was informed by the Executive Director/Owner that the Department of Education has not reimbursed him for October and November, and that he paid me for November 2011 from his personal account.

I called the Department of Education to verify the validity of what he told me. Is it against protocol for staff to contact the funding source? Shouldn't an organization have funds available to pay employees in a consistent and timely fashion?

Is it legal for a contractor or floorcovering store owner to retain 10% of a subcontractors paycheck in fear that there will be repairs and they use that money to pay someone to fix the problem. I live and work in Florida and for the first time ever I have a store owner who wants to keep $2,500.00 to be held for one year after I leave the company. Does anyone know if this is legal?

Hello,

I work for an office doing data entry. I must do my work at the office and I have a schedule that can vary, but is always between 5 and 8 hours a day, Monday - Friday. On days that I work 8 hours, I get my 30 min lunch break. I was given a brief training session for the work I do and I have a supervisor to whom I answer to. The job isn't permanent, my contract says that it will last from 2 to 4 months and that I am an independent contractor. However, it seems to me like I'm being treated as an employee but being paid as an independent contractor. Is this right for this company to do this? Shouldn't I be on the books as an employee, regardless of how long i'll be working there? If I should be a full employee there, what can I do about this situation? Thank you!

Thanks for thinking of LegalZoom. LegalZoom makes creating legal documents easy and affordable, but since we're not a law firm, we can't give specific legal advice regarding your employment. However, you can get free legal advice on the LegalZoom Facebook page every Friday and Tuesday. Check out Free Joe: http://zoo.mn/FreeJoe.

Ive been working as a hairstlist for 3 years with a company that refers to me as labor contract. I worked 54 hours a week and was told when to come in, what do do and say while I was at work and what time to leave work. I feel like my boss was treating me not only like dirt but like an employee and not labor contract. The only time I was labor contract was when it was time to do my taxes. She only called me labor contract to avoid holding out taxes which is fraud. She also charged me for chemicals but didnt give me credit on my 1099 for the chemicals I purchased. She also had me driving to another town to her other salon and expected me to keep driving there even after I told her no. She got 50% for every dime I made not to mention she got 100% for all chemicals I purchased. She came in the other day and took my keys for the salon and told me I can take a week or longer off. Shes calling herself punishing me for not answering her phone call on my day off. She has called me on every day Ive had off for 3 years and always wants me to come to work or run her errands or get her lunch and if I didnt do it I had to deal with hergripingor holding my check for a day or some underhanded act. Does anybody know what I can do legally?

I DID NOTHING WRONG. I DID NOT IN ANY WAY MISREPRESENT MYSELF OR ANYONE ELSE. NOR DID I DO OR PLAN TO DO ANYTHING ILLEGAL, INCLUDING ASKING SOMEONE TO LOOK IN CUSTOMERS' EMAIL. I ONLY WANTED TO SLIP AWAY QUIETLY, CAUSING THE LEAST AMT OF DAMAGE, BUT FOUND THIS WOULD NOT BE THE CASE. RETURNING TO SUCH A HOSTILE WORK ENV. IS IMPOSSIBLE AND MORESO NOW. BUT IT IS ESSENTIAL TO REMEMBER THAT JUST BC SOMETHING WAS NOT WITNESSED, DOES NOT MEAN IT DID NOT EXIST. I DID REPORT IT A TO ANOTHER STAFF MEMBER, WHO WITNESSED HOW VERY DISTRESSED I WAS. I WAS ATTEMPTING TO REPORT TO MY ASSIGNED SUPERIOR, BUT NEVER WAS ABLE TO SEE HER. INSTEAD, I REPORTED THE FULL AND ENTIRE NATURE OF MY PROBLEM TO MY IMMEDIATE SUPERVISOR, WHO ASKED TO SPEAK ON MY BEHALF. IN SO DOING, I ASSUMED SHE TOO, WOULD REPORT MY DISTRESS. JUST BC IT ISNT WITNESSED DOESNT MEAN IT DIDNT HAPPEN; BY ITS NATURE IT IS COVERT.....

I was hired without a contract signed, but paid a set amount per week, without with holding. I am assuming this means I am a Independent Contractor/1099 employee which is fine. My boss wants to dictate the times I work 8 to 5 and now wants a time card submitted. Is this something I must comply with or is my time up to me to decide when I work and how long? As to time cards, if that is wanted, then don't I become a salaried employee??

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Hello. I am a General Dentist hired as an Independent Contractor with a written agreement stating:"Independent Contractor shall be entitled to a Fee per day" Should I have my own working hours or schedule not bound to the Employers'? Thanks.

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If someone is classified as an "independent newspaper contractor" for a newspaper, and is in a buy/sell arrangement per copy, are they free to manage their contracted area as they determine to meet the contract specifications. My question is whether an independent contractor can be told what specific retail locations ie. newsracks they must service (also assume the contractor pays a newsrack rent per machine fee). Are Independent Contractor's in this structure free to establish their own sales area coverage to meet the contracted goals as set in the agreement. For example, if the newspaper company tells an Independent Contractor to place a newsrack in front of the Burger King, but the contractor doesn't feel it is in their best interest (for whatever reason), what is the legal opinion concerning being an independent Contractor vs. being told what an independent Retail sales contractor has to do?

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I work at a company as an "independent contractor", but I am there Monday-Friday 9-6. It is my full time job, I have been there about a year now, and I am a vital part of the company. If I was not there, decided not to show up, or just quit, it would put a serious halt on the operations. I do not make my own hours, decide my tasks for the day, or really anything that would classify me as an independent contractor. It is a small company, just my boss and I, and all equipment for the business and my job have been provided for by the owner. I do not get any health insurance, and was given a 1099 tax form this past tax season to pay my taxes. I am commuting for 2 hours each day every day, and dedicating my life to a job where I am not being valued as an employee. Is my boss doing this illegally to save money on state, federal, and employment taxes? I feel like I'm being taken advantage of, am I wrong? If so, what are the benefits to me as being filed as an employee of the company?

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I am trying to figure out if i am an employeee or contractor. I install appliances from numerous box stores. I have no choice in what jobs i get or the pay for those jobs. They are preset with the box store and the (people i work for). There is a scheduler for the (people i work for), that send me the work, i use my own equipment and am required to carry accesories and charge the customer and mark them up so everyone gets a cut. (the company i work for) takes a percentage of the pay and i get the rest.I have control of how my day is scheduled but not what needs done that day. the (people i work for) charge me extra if there is a error in paperwork or jobs not completed that day. Now want me to carry liability insurance, HELP.

Hi Mike - Thank you for contacting LegalZoom. While we make creating legal documents easy and affordable, we cannot offer legal advice on this matter. However, feel free to get free legal advice on the LegalZoom Facebook page every Tuesday and Friday. Check out Free Joe: http://zoo.mn/FreeJoe.

I was hired by a food manufacturer to do demonstrations at a chain of supermarkets. They supply all the equipment. They have instructed me on how to behave at the market,what to wear, as well as how to sell and promote their product. They email me to let me know what days and the hours I must work at each store. I have no real input in my scheduling. I work set days and can not take a day off, unless I ask at least 2 weeks in advance, and then it is at their discretion, or I may be dismissed. I am paid a set daily salary plus commission, according to how much I sell.They also had me sign a non compete clause, should I no longer work for them, prohibiting me from doing the same work for manufacturers making like products. There are 2 pay periods they did not pay me, as well as numerous checks which were short. I have tried to get my due compensation, with no luck.They either ignore me or put me off. Lately,I have been getting each pay check 2 weeks late.I am loathe to take any action at this time, as I am in need of a paycheck, and will surely be dismissed the moment I take any action. They do employ other people in the same capacity, as Independent Contractors. Am I considered an Independent, or am I really an employee? If the later is the case, what are my options in getting the company to pay whatever benefits they must pay if I am actually an employee.

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My employer says I'm an independent contractor, but she supplies the equipment, she controls my hours (Sometmes unfairly) and she's even holdin some of my hours and saying I didnt work them. How can I fix how she's treating me?

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Ok i have worked for this man for over7 years now im self employed i paymy insurance provide all tools + labor members of mine at no cost he calls me his employees and treats as such i have budgeted his jobs managed other subs etc. I have to be at work at 8:30 or im charged 30$ what do i do im advertising but havong problems.

Hello, I' am wanting some advise on how to find out if I was actually an independent contractor or an employee. I was recently terminated(reason unknown) after being employed by this company for 7 months. I sign a contract with them as being an independent contractor but I truly feel like I was an employee. I worked as a Ultrasound Tech for this company, that had a contract with free standing emergency rooms. I worked on call (24 hours) full-time for 4 days a week, off 2 days and that schedule was set by my supervisor (which was the CEO of company). I was paid hourly while on call and made additional money only when I was called out to do exam/s at the facilities where he told me to go. My pay dates where the 5th and the 20th of every month, and a grace period was listed on the contract up till 5 days after those dates. When I was hired, I was on a training period for 2 weeks to learn the protocols. All the supplies was provided by the facility such as the machine, gel, and etc. However, I was responsible for using my own vehicle, paying for gas, maintenance, toll fees and etc. I had to request to take a day/days off. This company has really been unfair and controlling to me and terminated me without a reason. They still own me 3 checks and stated they will pay me on the dates they are due and I'm no longer employed by them. Please help......thanks.



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