Employee vs. Independent Contractor – Part 6
Are you entitled to minimum wage and overtime pay? That depends on whether you are an independent contractor or a W2 employee.
Did you receive a 1099? That is no guarantee you are an independent contractor. Here’s the next installment – the last of the six “Economic Reality Test” factors — to help clarify where you stand… or sit.
Specialized skills are required for most jobs. Skill and initiative matter when deciding if you are an employee or an independent contractor. Independent contractors have specialized skills they market to support businesses. They learn and augment these skills through their own resources, paying for and attending as much (or as little) training as they think they need. However, if you attend employer sponsored training, you are considered an employee. If there is no autonomy about where and when you perform the specialized skill, you are considered an employee. How you get money also matters. If you are economically dependent on an employer, you are an employee. If you are earning on your own, and you are not dependent on one income source, that’s an independent contractor.
Scenario A: You have spent the last two years in an accelerated nursing program. You paid for the program and have decided to work closely with a few holistic centers near your home. You are responsible for scheduling your own appointments with clients, and you choose the days of the week you are available. You also find the new clients, which is worth it because of the scheduling flexibility. Employee or independent contractor? You would be considered an Independent Contractor – Why? You paid for your own training; you found your own clients; and you set your own schedule.
Scenario B: As a bus driver, you are given an assigned route and a schedule you must stick to. You have gone for training on your own and paid for certification. You can apply to any district in the state and are excited to get started. Once you are with a district, you will receive a paycheck every two weeks, and will not be working for any other districts. You will also have professional development training once a year which will be paid for by the district you work for. Employee or independent contractor? You are an employee – you have a set schedule, and you are dependent on one school district for your income source.
Resources:
https://www.dol.gov/agencies/whd/government-contracts/small-entity-compliance-guide
