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Are You an Independent Contractor? - Figure out if you’re an independent contractor or employee

Figure out if you’re an independent contractor or employee

Putting the key factors into practice

There are several key factors that go into determining whether you’re an employee or independent contractor (see above). To get a sense of how these factors come into play, let’s look at some real-world examples. 

As you read through the following scenarios, think about your own situation. Pick out any points that fit with your own circumstances. By comparing your own story to these, you’ll have a better idea of which category you fall into.

Scenario 1. Jeremy, freelance writer

Jeremy is a freelance writer. He was recently hired by a marketing firm to write blog posts for their website. Under his contract, Jeremy agreed to publish one blog post a week. Jeremy’s contract with the firm is for six months, with an option to renew it if the firm likes his work. This is his only paid gig.

Three days a week, he works from home using his own laptop. One other day, he works from the firm’s office and uses a desktop computer they provide. When he works from home, he’s free to set his own hours. On days where he’s in the office, the firm requires him to work regular business hours (9 to 5). 

Jeremy is an independent contractor because:

  • For the most part, he’s in control of how and when he does the work. 
  • He can do the work without any tools provided by the firm. 
  • His employment relationship with the firm isn’t ongoing.

Scenario 2. Shania, food delivery salesperson

Shania works for a locally-owned food delivery company. When she was hired, she signed an agreement saying she’s an independent contractor. The company assigns Shania to a specific region, where she’s responsible for deliveries and generating sales. She’s paid by commission, at a rate set by the company. She uses her own car to get around, but the company requires her to display its logo on it. 

Shania’s allowed to set her own hours, as long as her deliveries are made between 8am and 7pm on weekdays. She uses a tablet computer and order forms the company supplies. She also works for a ride-hailing company two or three hours a week. 

Shania is an employee because:

  • The company has direction and control of her work. (They decide where and when she works. And they require her to display the company logo on her car.)
  • She’s in an ongoing relationship with the company. 
  • She’s doing work that is core to the work of the business.
  • She relies significantly on supplies provided by the company to do her job (the tablet computer and order forms).

Scenario 3. Andrew, landscaper

Andrew is a college student, hired by a landscaping company for the summer. When he signed on, his boss told him he’s an independent contractor. Over the course of the summer, he works on several projects for the company. They dictate where he works, and when he needs to arrive at the job site. 

The company provides most of the tools and equipment, but Andrew is responsible for his own transportation. He’s paid an hourly rate set by the company. At the end of the summer, Andrew’s employment ends and he returns to school. 

Despite what his boss said, Andrew is an employee, because:

  • The company has direction and control of his work. (They tell him where to work, and when he needs to arrive. And they set his hourly rate of pay.)
  • The company provides most of the tools and equipment he uses in his work.
  • He’s doing work that the company is in the business of doing.
  • He faces no personal risk of loss or chance of profit.