Can You Tell An Independent Contractor When To Work? (Explained)
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The use of independent contractors, rather than full-time employees, has increased significantly since the COVID-19 pandemic. This has left many businesses confused on how to keep contractors and employees distinct, for legal and tax purposes, You may want to have a certain amount of control over your independent contractors, similar to what you have with employees, but doing so may change their work status and affect what benefits you are legally obligated to provide them.
Factors In Determining If They Are An Independent Contractor
Just because you call them an independent contractor, doesn’t mean they are one. Each state has rules for determining who is an independent contractor. We will use Oklahoma as an example, but the laws are pretty similar from state to state on this issue.
Oklahoma law defines an independent contractor as “an individual who engages to perform certain service for another, according to his own manner and method, free from control and direction of his employer in all matters connected with the performance of the service, except as to the result or product of the work.” The court goes on to reason that determining if an individual is an independent contractor should be handled on a case-by-case basis using the following factors:
- The nature of the contract between the parties;
- The degree of control which the employer may exercise on the details of the work;
- If the employee works for other people;
- The kind of occupation;
- The skill required in the particular occupation;
- Whether the employer or the workman supplies the instrumentalities, tools and the place of work for the person doing the work;
- The length of time for which the person is employed;
- The method of payment, whether by the time or by the job;
- Whether or not the work is a part of the regular business of the employer;
- Whether or not the parties believe they are creating the relationship of master and servant; and
- The right of either to terminate the relationship without liability.
You Can Still Have Some Control Over Your Contractor’s Hours
There are some instances where you have slight control over the hours your independent contractors work, without changing their statuses. One example is a sales job. You may hire a commission-based independent contractor to sell your product out of a storefront. While you can’t dictate when they come and go, you can require them to be at the store within its business hours of 8 a.m. to 8 p.m.. As long as they can come and go freely within that time frame, they are still an independent contractor.
Conversely, if you hire someone to answer the phones at your office and need them there from 8 a.m. to 5 p.m., they are NOT an independent contractor because that employee cannot come and go at their leisure. If they chose to show up at 11:30 a.m., you would be unhappy with their performance. This means they are a traditional employee rather than an independent contractor.
What To Do If You Need Your Independent Contractor To Work Certain Hours
If you need your independent contractor to work specific hours, it’s time to consider making them an employee. One of the hallmarks of an independent contractor is that they can work at any time they choose and often have multiple clients/employers. If you control those work hours, they are most likely not an independent contractor. If you are looking to make your independent contractor an employee, you will need to provide them with the benefits owed to an employee, such as workers compensation insurance.
The Bottom Line
If you are questioning whether a person working for you is an independent contractor, they most likely are NOT an independent contractor. Regardless of what title you give them, you need to make sure they fall into the legal definition of each type of work status.
If you have an independent contractor who has become more like an employee, it is time to provide them with the benefits they are legally entitled to. If you have questions about your insurance, and want to make sure all of your employees are covered, give us a call for a free consultation.
About The Author: Austin Landes, CIC
Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.