To help employers determine whether to classify a worker as an independent contractor or an employee, the Department of Labor has developed a test with six key factors. These include:
1. Is the work provided integral to the company's business?
2. Does the worker or the employer control worker's opportunities for profit and loss?
3. Does the worker or the employer provides the equipment/facilities necessary to perform the job?
4. What is the level of the worker's skill and initiative?
5. What is the expectation of permanency between the worker and the employer? and
6. How much and what degree of control does the employer has over the work performed?
Additionally, the Internal Revenue Service (IRS) evaluates a few different factors to make this determination. These factors include:
1. Does the company have the right to control how the worker perform his or her job?
2. Does the company or the worker control the business aspects of the workers job, such as determining how the worker is paid, what expenses are reimbursed, and who provides needed tools and supplies? and
3. Is there a written contract detailing the employment arrangement?
While no one factor is determinative, taken as whole these factors provide guidance concerning whether you should be considered an independent contractor or an employee.
For more information, or if you have questions concerning whether you should be classified as a contractor or an employee, please contact the dedicated Atlanta wage and hour lawyers at Buckley Beal LLP for an immediate case evaluation.