How do I know if I should be classified as an employee rather than an independent contractor?

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How do I know if I should be classified as an employee rather than an independent contractor?

I run a gold prospecting camp and am considered a contractor by the company. From all I have read about state labor law it appears that I should be considered an employee. I live on the property and keep up the property with the club’s equipment. I collect money from the members. I have to fill out the paperwork at the end of the month and deposit the funds I have collected. Some of the paperwork I fill out even has a place for the employee’s signature. They have all the control over our outings and any expenses I have, like driving to the post office, etc… are reimbursed. I was the assistant caretaker and after the caretaker quit unexpectedly I assumed his responsibilities. That was over 8 months ago.

Asked on July 1, 2015 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

There is no single "bright line" test for when someone is an employee, but if the employer can direct you as to not just what to do but how to do it and control your hours of work, you are most likely an employee, not a contractor. How factors suggesting that you are an employee, not a contractor, include:

1) The employer provides all equipment and supplies.

2) You only have the one employer (independent contractors have, as the term implies, at least a measure of "independence" and are not entirely dependent on one employer).

3) You do not market or advertise your services to other potential employers.

4) You are not responsible for your own profit or loss, and in fact cannot have a loss (like a business, a contractor can lose money if he/she underestimates expenses or brings in too little revenue, whereas an employee can't lose money by working).

If you think you are being misclassified, you should either consult in person with an employment law attorney or else contact your state's labor department. If you have been mischaracterized, your employer may owe you additional compensation (e.g. overtime), may need to make tax payments (withholding) for you, and may owe you benefits.


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