Whether you are an employee or an independent contractor makes a big difference in your workers’ compensation rights: Independent contractors do not have them, in Missouri. However, knowing whether you are an employee or an independent contractor is not always easy, and many businesses deliberately misclassify their workers in order to save money. Therefore, knowing what your status should be can be very helpful.
Luckily, the Internal Revenue Service (IRS) has weighed in on the subject before, and has used fewer than 20 factors to answer the question, in the past. Here they are, with a brief explanation for each one.
The 20 Factors the IRS Uses for Employment Status
- Instructions. Employees are given specific instructions on how, when, and where to do their jobs. Independent contractors, on the other hand, are allowed to do the job on their own terms.
- Training. Employees receive training on how to do specific tasks for their employer, while independent contractors are expected to have the skills, already.
- Integration with the employer. Employees are integrated into the business they work for, while independent contractors typically treat the business as their client.
- Personal performance. Employees are often required to do their work, personally, while independent contractors can have others do their work, for them.
- Assistants. Employees can have assistants who are hired, supervised, and paid by their employer, while independent contractors have to provide assistants, themselves.
- Continuing relationship. Employees expect to be with their employers for a long time, while independent contractors are often hired on a project-by-project basis.
- Working hours. If the employer sets someone’s working hours, that strongly suggests the worker is an employee, not an independent contractor.
- Full day of work. Independent contractors are expected to have several clients at once, so requiring a worker to spend all day often means they are an employee.
- Multiple bosses. If a person works for more than one firm at the same time, it suggests that they are independent contractors, not employees, of those businesses.
- Working for the public. Employees work for one person – their employer. Independent contractors tend to solicit work from the public.
- Site of work. Independent contractors are often allowed to work remotely, especially when the work does not have to be done at the employer’s workplace. Employees typically have to be on site.
- Dictating the sequence of work. If an employer dictates the order in which work is to be done, their worker is more likely to be an employee.
- Reports. Employers who require their worker to submit regular reports suggests that the worker is an employee, not an independent contractor.
- Payment structure. Employees tend to be paid by the hour, day, week, or month, while independent contractors tend to be paid upon a job’s completion or on commission.
- Expenses paid. Employers tend to pay the travel or business expenses of their employees, but not their independent contractors.
- Furnishing tools or materials. If a worker is allowed to use the employer’s tools, equipment, or materials, then the worker is typically an employee. Independent contractors typically provide their own.
- Investing in facilities. Independent contractors are expected to invest in their own working facilities, while employees tend to have these facilities provided for them.
- Profit or loss from work. Independent contractors have a risk of profits or losses from the project they work, while employees tend to get paid the same, regardless of whether the project was a success or not.
- Right to discharge. Employers can fire their employees, and threaten to fire them for not following instructions. Independent contractors, on the other hand, cannot be fired if they are meeting the project’s specifications.
- Right to quit. Employees tend to be able to quit without being penalized, while independent contractors often have to breach their contract to quit a project.
St. Joseph Workers’ Compensation Attorneys at the Smith Law Office
Workers rarely fall entirely on either side of the employee or independent contractor question. Businesses, though, tend to try to classify their workers as independent contractors, rather than as employees, so they have fewer responsibilities, including for workers’ compensation.
The personal injury and workers’ compensation attorneys at the Smith Law Office in St. Joseph know to look for employment classification issues when someone gets hurt on the clock. Even if you think you are an independent contractor, reach out to our lawyers to make sure. You might be wrongly classified, and deserve compensation for your workplace injuries.
Call us at (816) 875-9373 or contact us online.