Identifying An Independent Contractor

The following are factors that a judge will consider to determine whether and individual is an independent contractor, and thus not an employee:

  1. Obtain a Federal Employer Identification Number from the Federal Internal Revenue Service(IRS) or have filed business or self-employment income tax returns with the IRS based on work or service performed the previous calendar year.
  2. Maintain a seperate business establishment.
  3. Perform work that is different than the primary work of the hiring business and perform work for other businesses.
  4. Operate under a specific contract, and is responsible for satisfactory performance or work and is subject to profit or loss in performing the specific work under such contract, and be in a postition to succeed or fail the business's expenses exceed income.
  5. Have a recurring business liabilities and obligations.
  6. Obtain a liability insurance policy (and if appropriate, workers' compensation and disability benefits insurance policies) under its own legal business name and Federal Employer Identification Number.
  7. Have its own advertising such as commercials, listings in phone book and/or business cards.
  8. Provide all equipment and materials necessary to fulfill the contract.
  9. Control the time and manner in which the work is to be done.
  10. The individual works under his/her own operating permit, contract or authority.

Special Note For The Trucking Industry:

To be considered an independent contractor, drivers must also be transporting goods under their own bill of lading and under their own Department of Transportation Number.