Independent Contractor vs Employee Checklist & Major Differences

It’s essential to understand the differences between an independent contractor and an employee to make sure you’re not violating any laws or rules. There are various tax differences, legal benefits, and other factors that make the two very different. Below, we also outline a checklist that can help companies determine whether they are hiring an independent contractor or employee.

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Independent Contractor vs Employee Checklist

Before we dive into the details, let’s get right to the checklist that you need to determine whether someone working with you is an independent contractor or an employee. There are various factors to consider when a company identifies whether a worker is a contractor or employee. Below is a checklist that can be used. If 3 or more boxes are checked off, it’s likely the worker is an employee. 

☑️ Is the company in control or has the right to control what the worker does and how the worker is doing the job or project?

☑️ Does the company control the business aspects of the worker’s job? These arrangements include aspects like how the worker is paid, whether expenses are reimbursed, and who provides tools and supplies.

☑️ Is there a written contract or employee benefits such as a pension plan, insurance, or vacation pay?

☑️ Will the relationship between the company and worker continue and is the work a key aspect of the business?