A very good friend of mine called a few weeks ago asking me to review a contract for her. She works as an independent contractor in website design. I never got to see the contract, but she did tell me that the client was requiring her to be onsite for certain hours every day and she didn’t think that was right. I told her that she was absolutely justified in her suspicion because what the client was asking her to do would make her more of a temporary employee rather than an independent contractor.
So what makes an independent contractor different from an employee? California Labor Code, Section 3353 states the following:
Independent contractor” means any person who renders service for a specified recompense for a specified result, under the control of his principal as to the result of his work only and not as to the means by which such result is accomplished.
Additional factors to be considered are on the DLSE site and go something like this:
1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
2. Whether or not the work is a part of the regular business of the principal or alleged employer;
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
5. Whether the service rendered requires a special skill;
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
8. The length of time for which the services are to be performed;
9. The degree of permanence of the working relationship;
10. The method of payment, whether by time or by the job; and
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.
The questions you need to ask yourself (as an HR professional) are:
1. Are we requiring the consultant to work onsite?
2. Are we requiring the consultant to only work during certain hours?
3. Are we providing the consultant with equipment i.e. a computer?
4. Are we requiring that the consultant manage any employees?
5. Are we paying the consultant through our regular payroll?
If the answer is yes to any of these questions, well, then you’ve just hired yourself an employee.
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