South Bend / Mishawaka, IN – Is your worker an employee or an independent contractor? Well, that’s an easy answer or is it?
The fundamental test to determine the answer to this question, using the DOL or IRS tests, is control. The more control you (employer) exercise over the individual, the more likely he or she will be considered an employee rather than an independent contractor. Does it matter? Yes. An independent contractor contracts to produce the required result his/her way, generally using his/her own tools and on their own schedule. An employee produces the desired result, usually upon the orders and control of the employer over the means and methods used to achieve that result.
There is also a general rule associated with the above. An employer is not liable for the negligence of an independent contractor, because the employer does not control the manner in which the contractor performs his work, which is “regarded as the contractor’s own enterprise”. On the other hand, the employer who has the right to control the means and methods of the contractor’s work has an employee.
Lesson to be learned: It is not only the actual exercise of control over the individual that makes them your employee, it is also the right to exercise that control over the individual that moves the meter from the category of independent contractor to employee. So the next time you consider entering into an agreement with someone you want to classify as an independent contractor, decide whether you want to lose or gain control of that person or situation.
DISCLAIMER: The material provided in this article is presented for informational purposes only and should not be acted upon without advice and counsel from an experienced attorney familiar with the facts of your specific situation.
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