How To Determine If A Contractor Is Independent

Construction is a risky occupation.  Accidents can happen that can injure workers. Conditions in a worksite can lead to illness.  At its worst, these can even be debilitating and prevent them from future work.

In cases workers are injured or become ill while on the job, a worker's compensation insurance will provide coverage.  It is a state-based program for employees that provides benefits for situations mentioned earlier.  All companies are required to purchase this for their employees.  However, independent contract workers or independent contractors are exempted from this.

Over the course of a project, contractors can enlist help from independent contractors to complete certain jobs.  Independent contractors are not eligible for worker's compensation coverage.  This is because employers are not required by law to purchase workers compensation coverage for independent workers.  The sad truth is that some employers will try to pass off some employees as independent contractors to save on insurance costs and certain taxes.  To clear the confusion, the following are points to determine if a contractor is independent or not.


Salary and Pay
Employees are usually paid wages regularly either by the hour or are salary based.  On the other hand, independent contractors are paid by the specific job they were hired for.

Direction and Control of the Work
Independent contractors will accomplish the job or work they were hired free of direction. They are not controlled by the party that hired them.  Meaning, they have a free hand on how their work is done and act independently.  The agreement from the hiring party and the independent contractor is for what should be accomplished and not how it is done.

Type of Work
If the worker receives regular assignments or jobs from the same company, he is most likely an employee.  In contrast, independent workers often work for multiple companies and typically performs just one job.

Equipment
Another indicator is who provides the equipment.  Usually, an independent contractor will provide their own equipment to finish their job.  As for employees, it is the employer that provides the equipment that they will be using.


Conclusion

Even if the term “independent contractor” is written in your contract, this is not always sufficient grounds for your to be classified as such.  In determining your actual status, the points raised above will be considered.  These will be the indicators to determine if you are an employee of that company or an independent contractor.

At CSIS Insurance Services, Inc. we put our clients first by offering them policies that they can afford. Learn more about our policies and services by calling our agency at  (888) 501-2747. You can also request for a free quote by CLICKING HERE.

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