Employee or Contractor

By Kimberly Daise

It is always a daunting task to figure out who is a contractor or employee and preventing those hired as employees from being contractors, or vice versa. A few of the major things to be considered are cited below:
1. The extent to which the employee has un-reimbursed visit expenditures. Independent contractors usually have un-reimbursed expenses much higher than workers. Employers ought not to regularly approve reimbursement requests for business-related expenses, since this may be used as proof of employee status.
2. The extent to which the worker makes professional services accessible to the targeted market. In cases where the employee offers the same work to various companies, it is a major sign of independent contractor status.
3. The extent of the employees’ investment. A contractor usually holds a considerable investment in the facilities he employs in completing services for somebody else. Among the most valuable investments is an office space. Employers should not give supplies, tools, or equipment to persons hired as independent contractors.
4. An independent contractor often makes a profit or even incur a loss on the job. Workers receive paychecks regardless of whether the firm they are employed by makes profits or not.
5. Workers are paid on the monthly, weekly, or hourly basis. An independent contractor is generally paid by the task completed.
6. Does the employing company offer employee-type benefits like pension programs, insurance, sick days, or vacations? Independent contractors rarely provide such benefits.
7. Workers hired on a permanent basis are often regarded as employees. When a worker is given a job on the premise that the working relationship will carry on indefinitely, this indicates an employee/employer relationship.