Legally, how can you tell the difference between an independent contractor or an hourly employee?

My husband is paid hourly, must clock in and out, must follow a schedule, must where a uniform, and must use his “employer’s” supplies. However, he must have a GE tax license, is not paid for travel time to or from client locations despite carrying said supplies, does not have taxes taken out of his check, and is not provided with compensation or insurance benefits despite working on average of 30 to 50 hours per week for over a year.

Asked on March 21, 2012 under Employment Labor Law, Hawaii

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

For the exact tests of when one is an independent contractor vs an employee, look on the Dept. of Labor (DOL) and the IRS websites--the main one for this purpose is the DOL test, but the IRS sheds some light the diference, too.

In brief, an independent contract is INDEPENDENT to at least some degree. Typically, he or she has at least partial control over hours and location (and generally does not clock in); determines how to do the job (e.g. the supervisor doesn't micromanage or direct how to do things); provides own equipment; usually has more than one client or employer, if not all at the same time, then generally in a series; markets his or her own service; and is responsible for his or her own profit or loss (so that if the contractor prices or quotes services wrong, he or she can lose money, unlike an employee, who always makes money for working).


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