6 Factors for Determining Whether a Worker Is an Independent Contractor

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From Texas Lawyer, Jay M. Wallace, Lindsey L. Goldstein and Alana K. Ackels discuss 6 factors that affect whether a worker is an independent contractor or employee.  They write about the 6 factors, including whether the work is an integral part of the company’s business, whether the worker can experience a profit or loss, the worker’s skill and initiative and others, and they discuss 3 common misconceptions about worker classification.  They write:

Common Misconceptions

1. A contract says they are an independent contractor. Although Texas traditionally upholds parties’ right to contract to control the terms of an employment relationship, the DOL will not recognize as an independent contractor an individual who has a contract stating that he is an independent contractor, but does not meet the department’s other behavioral or financial requirements listed above.

2. The employee works part-time or flexible hours. Individuals who work non-traditional hours, either part-time or some other sort of flexible hour arrangement, are not automatically independent contractors simply because these workers do not look like a traditional employee who comes into the office and works designated office hours. In fact, even if the worker has an incorporated business that indicates that he does part-time work as an independent contractor, for example, “Independent Contractors for Engineering, Inc.,” that has been approved by the U.S. Secretary of State, the DOL may still find that these individuals are full-time employees depending on the tasks being performed.

3. The company does not pay him benefits. Whether an employer pays a worker benefits may be a small part of the analysis to determine whether a worker is an independent contractor, but is not dispositive in classifying a worker as an independent contractor. Employers often over-estimate the impact of not paying a worker benefits on the DOL’s analysis, and employers must be careful to understand that this factor is no more important than any of the other factors listed above.

Read the full story at 6 Factors for Determining Whether a Worker Is an Independent Contractor 

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