Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
What issues should be considered when determining whether the “right to control” factor will weigh in favor of an independent contractor determination?
At its current growth rate, the majority of the U.S. workforce will be freelancers by 2027.1 Between federal and state case, statutory, and administrative law, there are too many tests to count for determining whether a worker is an employee or independent contractor. Even within the same jurisdiction, an organization may face different tests depending on the court or administrative agency making the assessment.
A primary consideration in determining whether an individual acts as an independent contractor is the right to control. While there are multiple tests to evaluate the right to control, some of the key factors those engaging independent contractors, should consider include:
- When, where, and how long the individual will work
- What tools and equipment the individual will use and who is responsible for procuring such equipment
- The kind of occupation, with reference to whether the work usually is done under the direction of a supervisor or is done by a specialist without supervision
- Whether the individual receives instruction of any kind with respect to the performance of tasks
- Whether the individual is required to wear certain clothing
- The skill required in the particular occupation
- The manner in which the work relationship can be terminated
- The method of payment, whether by the project or by time
There are a host of additional issues that need to be considered including whether the work being performed is an integral part of the principal’s business and the parties’ intention at the time of establishing the relationship, which can be persuasive, although not determinative.
Those engaging with independent contractors should consider analyzing any potential risk they may have with individuals conducting work as non-employees and should take into account various applicable federal and state regulations so that they can better understand how to lower the risk of misclassification in the appropriate jurisdictions.
As always, please consult your Littler attorney for additional guidance on these or related issues as well as for information on tools to conduct your independent contractor assessment with ease, like our ComplianceHR tool.
1 Edelman Intelligence, Freelancing in America: 2017, at 5 (Oct. 17, 2017)