How to Tell If I Am An Employee or an Independent Contractor
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How to Tell If I Am An Employee or an Independent Contractor

Often times when you land a job, you are just happy to be hired and not so much concerned with what your status is with them so much as the size of your paycheck. However, there are huge differences between if your employer refers to your as an “employee” versus if they just call you an “independent contractor.” However, workers tend to think that these two terms are interchangeable, but they are not, at least not when it counts. So what is the difference between an employee and independent contractor, and how can you tell which you are?

How an Independent Contractor Differs from an Employee?

An independent contractor is a somewhat difficult status to define, but it is outlined by the common law principles of the Fair Labor Standard Acts that help guide courts on the issue. These common law principles that define an independent contractor include:

  • The worker receive payment independent of employee payroll and not under steady pay
  • The worker provides their own supplies, tools, equipment, and materials
  • The worker’s terms of employment state they can be discharged at any time as well as can choose not to come to work
  • The worker is given unsteady hours of employment that would dictate they fell into the realms of independent contractor work
  • The work is temporary in nature

If most of the above is true about your job, particularly in terms of payment or work hours, then there is a good chance that you are considered an independent contractor rather than an employee. An employee will be on the payroll and will be expected to work certain hours on each project they are assigned to. While an employee in a realm such as construction work may be asked to provide their own tool belt, for example, they will most certainly never have to provide the materials in which they need to work on to complete a project. While even employees may be considered temporary ones, a large majority of businesses will label only temporary workers as independent contractors.

Why the Label Matters?

Does it really matter if you are an employee or an independent contractor? Most of the time, no, it doesn’t. However, it is important to know. One of the biggest issues that face independent contractors is if they get hurt at work. For employees, if they get hurt on the job, they are entitled to worker’s compensation. However, the same is not always true with independent contractors. While in some circumstances they may be able to get it, it is almost always a fight.

Furthermore, your employment status is important when it comes to taxes. When a worker is an employee, the employer must pay state and federal unemployment tax, social security tax, as well as worker’s compensation premiums for them. This is why many employers hire independent contractors, as they are not responsible for those payments then.  If you are incorrectly labeled or incorrectly label yourself on your own taxes, both worker and their employer may face the wrath of the IRS if they discover it. It is also worth noting that independent contractors suffer some quality of work detriment as well.  For example, they are not entitled to meal or rest breaks, meaning that if your employer so chooses, they don’t have to provide time for them and can dismiss you for taking them.

If you are still not sure if you are an employee or an independent contractor, and your employer is dodgy about the question, the IRS has a number of helpful guidelines to help you classify yourself.  However, if your employment status is getting in the way of your work injury or any reimbursement, get in contact with us. There are a lot of jobs in California, and not all employers are above board, but the Aiman-Smith & Marcy Law Firm can help you fight for your rights as an employee so you can protect yourself.