INDEPENDENT CONTRACTORS AND FREELANCERS

In the digital and gig-economy, we know the hustle of independent contractors or freelancers. Yet, you may struggle with knowing what benefits you are entitled to. Generally, if the employer has control over the details of how you perform your work, then you are considered an employee and not an independent contractor/freelancer. If you have the freedom and flexibility to decide how and when you want to do the work, then you are a freelancer.

It’s really important for you to know the distinctions between independent contractor and employee. Based on what category you fall into you may be entitled to company benefits. Here are some key things to look for:

Financial Control: Does the business control the financial aspects of your job? Consider:

• Who provides equipment to complete the work?
• Unreimbursed expenses, independent contractors are more likely to incur unreimbursed expenses than employees.
• Opportunity for profit or loss is often an indicator of an independent contractor.
• Independent contractors are generally free to seek out business opportunities in the open market.
• Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee.

Relationship: The type of relationship depends upon how you as the worker perceive your business relationship. Think about:

• Is there a written that describes your relationship with the business relationship? A contract will usually state whether you are an employee or an independent contractor.
• Does the business provide employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay? Businesses generally do not grant these benefits to independent contractors.
• How long will the business relationship last? Does the relationship end after the project finishes or do you continue working with the business for an indefinite period of time. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, show intent to create an employer-employee relationship.