Do you know the difference between an employee and an independent contractor?
There are significant legal distinctions between an employee and an independent contractor. However, it's not always easy to tell which category a particular worker falls into. There is no simple, uniform test for classifying workers, and simply calling someone an "independent contractor" is not determinative. Ultimately, the determination must be made by considering the particular circumstances in each situation.

Right to Control: The main issue is who has the right to control the manner and means of accomplishing the desired result. If the principal has the right to control, an employer-employee relationship exists, even if the right is not exercised.

Factors to Consider: If there is doubt about who has the right to control, the following factors must be considered together. Bear in mind that no single factor is determinative in itself.

• Distinct Occupation or Business: Is the service provider engaged in a separately established occupation or business?
• Industry Custom: What is the usual custom for this type of occupation, in this locality?
• Supervision: Is this type of work usually done under the direction of a principal without supervision?
• Skill: What level of skill is required to perform the services necessary to accomplish the desired result?
• Tools and Place of Work: Who provides the tools and place of work for the person doing the work? (This factor may be less significant when the worker is providing intellectual services.)
• Length of Service: For what length of time are the services to be performed? Is the work continuous in nature, or an isolated event?
• Method of Payment: Is the worker to be paid by time, by piece rate, or by completion of the job?
• Regular Business: Is the work which is being performed part of the principal's regular business, from which the principal may profit?
• Benefit to Principal: Is the principal engaged in a business enterprise, or are the services being performed for the benefit or convenience of the principal as an individual?
• Principal's Actual Exercise of Control: To what extent has the principal actually exercised control over the manner and means of performing the services? Unlike the right to control, this is not determinative, but may have some bearing on the classification.
• Intent of the Parties: What are the parties' beliefs regarding whether they are creating an employer-employee relationship? This factor has some weight, although not very much.
• Economic Realities: The nature of the work and the overall arrangement between the parties must be examined to determine whether workers come within the "history and fundamental purposes" of employee protection laws. For example, the California Supreme Court has ruled that even though sharefarmers work very independently, they are still employees.

ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952), or by e-mail (geskridge@eskridgelaw.net.) Please visit our website at www.eskridgelaw.net or www.employmentattorneys.net.

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