Independent Contractor or Employee?

May 5, 2014

Many employers misclassify employees as independent contractors, not understanding the huge liability this presents for their company. Take a look at the basic definitions to see if you’re classifying correctly!

“The numerous tests under state and federal law defining the legal status of independent contractor vs. employee typically boil down to a basic control test.

  • If individuals can come and go on their own time, generally direct their own work product, use their own facilities and supplies, and are free to work for other companies, they are likely true independent contractors.
  • If, on the other hand, an employer retains absolute control over how individuals’ work products will be generated; when, where, and how they will work; provides facilities and supplies; and demands full-time attention to its work to the exclusion of all other projects, then the “independent contractor” is likely an employee.”

Excerpted from the Michigan Chamber’s 2014 Employment Law Handbook authored by attorneys from the Miller Canfield law firm.