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Independent Contractor

An independent contractor is a person or business engaged to provide goods or services to another person or business. Individuals acting as independent contractors are treated differently than employees for tax and labor law purposes.

A worker might be appropriately classified as an independent contractor if the worker is:

  • engaged for a temporary project,
  • uses his or her own equipment and materials,
  • controls the hours of the employment, can be discharged without becoming unemployed, and
  • remains independent of the contracting business.

Substance drives whether or not a worker is properly classified as an independent contractor. In other words, merely calling a worker an independent contractor or entering into an independent contractor agreement with a worker is not sufficient to support proper classification of a worker as an independent contractor. Misclassification of an employee as an independent contractor can result in significant liabilities.