Frequently Asked Questions
Q: What are the characteristics of an independent contractor?
In trying to ascertain whether or not an employee is a contractor, a useful gauge is to look at the relationship between the employer and employee with some of the following factors which may be indicative of a contractor:
· whether a written or oral agreement exists;
· the level of direct supervision in relation to the work undertaken;
· evidence of a separate business.
Generally speaking, employees are deemed to be an agent of the principal employer and will be paid for the provision of labour, and as a consequence, employees will usually be engaged under a contract of service. In contrast, contractors are usually independent actors with employers having vicarious liability for the actions of a contractor, and as a consequence, contracts will usually be engaged under a contract for services.
The general rule of thumb for contractors is that such employees are usually asked to perform a particular assignment, or to produce a particular result, with payment tied with the completion of the assignment, or achieving the desired result.