Saturday, July 16, 2016

Are you Considered an Independent Contractor ?





To be considered an independent contractor, generally a person has independence to perform work and is not subordinate to a company's directives and regulations, and there is no exclusivity in the relationship between the parties.
Most all countries uphold independent contractor status if the service provider can truthfully answer "yes" to five questions:

  1. Do you have "authoritative control" to do your work the way you want to — free from instruction on process, free from discipline, free from work rules, free from your principal's "supervision and control"?
  2. Are you free to set your own schedule and hours?
  3. Do you provide your own office and supplies, pay your own business expenses, and hire your own assistants?
  4. Do you get paid only for work done, such as hourly/task pay (no paid vacations/holidays)?
  5. Can you, and do you, have other paying clients — and do you market your services to the public?

It is a good idea to keep the line between an employee and a contractor very clear, which is best done through an explicit independent contractor agreement.  A contractor's agreement to perform services should clearly state the type of relationship that exists and should outline the terms of service and specific deliverables.  It should not specify any control over the method in which the work is performed.  The company should not direct how the work is done, through instructions, training, or control over how the contractor spends money earned by the contract, or any other means.  Clarifying the relationship in a contract benefits both the company and the contractor by preventing tax issues from arising that could put both parties at risk of being investigated.

 






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