How ca you determine whether or not a worker is an independent contractor or an actual employee?

UPDATED: Sep 30, 2022

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How ca you determine whether or not a worker is an independent contractor or an actual employee?

The taxi drivers at a cab company pay the company a daily rental fee for the use of the company cabs, but get to keep all the fares that they earn during their driving shifts. The drivers determine their working hours and must pay for the gas they use during their shifts. The company carries an umbrella auto insurance policy that covers the drivers but it does not provide any benefits to the drivers. Are the drivers employees under the NLRA or are they independent contractors?

Asked on October 7, 2016 under Employment Labor Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Independent contractors are, in brief, more-or-less "independent" of the company for which they work. You describe a situation in which the drivers determine their own working hours--that's one of the chief indicators of being an independent contractor (controlling one's own hours). You also write that they pay a rental fee and for their own gas, and keep all their fares; that means that unlike an employee, who cannot lose money by working, the drivers could have a loss for any given day (if the rental fee plus gas exceeds the fares they collect): that's another strong indicator of being an independent contractor, not an employee. Based on what you write, these drivers appear in fact to be independent contractors.

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