How do I know if employees are independent contractors or employees?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

How do I know if employees are independent contractors or employees?

This is not now, I am looking to the future, so barring any new laws what would the answer be now? I am starting a virtual services business, things like social media posting, email services, bookkeeping, web design and the like.I’d want to be able to hire people for specific projects, some may be ongoing, some may be short term. I do not assume they are working solely for me. I would assume they have other gainful work. There is no non-compete in place. There is a non-solicitation and NDA in place. Here are a couple examples: (1) I hire a person to create social media posts for 5 or 6 clients. The posts can be uploaded anytime as long as they are in advance by 2 weeks. There are guidelines to follow such as no offensive material, freshness, authoritativeness etc when creating the posts but no training is offered. The person can work whenever and where ever. Is this an IC or W2. (2) I need a person to do some email work. While they can decide what hours to work it does need to be done during business hours. There is some training to use the correct system for the client and to gain an understanding of the client’s business in order to answer the email. Would this be IC or W2? (3) I need a person to do some reseach on a product. This can be done whenever and where ever. I would pay hourly for time spent on the research. Detailed records of work meaning how many hours and minutes and dates worked would be needed for payment. Would this be IC or W2? I hope I explained this in a coherent fashion.

Asked on September 10, 2017 under Employment Labor Law, Alaska


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

While it's often not a 100% clear brightline between independent contractor and employee, 1) and 3) are most likely IC's: not only are they working where and when they want, but you are essentially "buying" services or products from them (the posts; the research) which, even if you have some parameters for acceptable deliverables, still means that you are not managing in any way how they do their work. They create posts or do research and submit; you in essence only have involvement the beginning (letting them know what you want done) and end (receiving/approving) and no i the middle of the process.
2) *might* be a contrator, but a more conservative view would hold them to be an employee due to the control over work hours, training on the system which they must use (i.e. they are not using their own "tools" but rather yours), need to understand *your* clients, and the fact (I presume) that since they are answering emails for you, there is necessarily more ongoing oversight of what they are doing to make sure it comports with your policies, business model, customer relations. The role is not as independent 1) and 3).

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption