Many factors are involved in determining whether an individual is an Employee or an Independent Contractor. Basically, an Employee comes and goes according to your instructions, uses your tools, your facility, and basically works for you as instructed on a regular schedule. Income tax is paid and deducted by you or the company. Common Law Factors are used to make the determination of the status of an individual as an Independent Contractor or Employee.
20 Factor Common Law Test: (Key factors are in BLUE. )
** Individuals are generally employees if they:
1. Must comply with employer's instruction about the work.
2. Receive training from or at the direction of the employer.
3. Provide services that are integrated into business.
4. Provide services that must be rendered personally.
5. Hire, supervise and pay employees for the employer.
6. Have a continuing working relationship with the employers.
7. Must follow set hours of work.
8. Work full-time for an employer.
9. Do their work on the employer's premises.
10. Must do their work in a sequence set by the employer.
11. Must submit regular reports to the employer.
12. Receive payments of regular amounts set by the employer.
13. Recieve payments for business and/or travel expenses.
14. Rely on the employer to furnish tools and materials.
15. Lack a major investment in facilities used to perform the service.
16. Cannot make a profit or suffer a loss from their services.
17. Work for one employer at a time.
18. Do not offer their services to the general public.
19. Can be terminated by the employer.
20. May quit work at any time without incurring liability.
