Florida Employee or Independent Contractor Part 1
Florida Business Lawyers are often asked to help determine if someone is considered an independent contractor or an employee for various scenarios. There are three major tests for employment status under various federal labor and employment laws.
A. Common Law Control Test / IRS 20 Factor Test
B. The Economic Reality / Economic Dependence Test
C. The "Suffer or Permit to Work" Test
A. Common Law Control Test / IRS 20 Factor Test
This is the test for employee status under FICA, FUTA, ERISA, most Workers' Comp laws and the NLRA. It is also used in ADA, Title VII, and some OSHA cases. This test can be used to determine who is the employer, if the question is which of a number of entities employs an employee.
The IRS 20 factor test is the most comprehensive view of the common law right-to-control test. Since the IRS 20 factor test is the narrowest , if employment status is found, a worker is automatically covered under the broader economic reality and suffer or permit test.
A worker is more likely an employee and not an independent contractor if the worker:
1. Is required to comply with the employer’s instructions about the work.The Economic Reality and the suffer or permit to work tests will be covered in Part 2
2. Receives training from the employer.
3. Provides services that are integrated into the business.
4. Provides services that must be rendered personally.
5. Hires, supervises and pays assistants for the employer.
6. Has a continuing relationship with the employer.
7. Follows set hours of work.
8. Works full-time for the employer.
9. Works on the employer’s premises.
10. Does the work in a sequence set by the employer.
11. Submits regular reports to the employer.
12. Receives payments of regular amounts at set intervals.
13. Receives payments for business or traveling expenses.
14. Relies on the employer to furnish tools and materials.
15. Lacks a major investment in facilities used to perform the service.
16. Cannot make a profit or suffer a loss from the services.
17. Works for one employer at a time.
18. Does not offer services to the general public.
19. Can be fired.
20. Can quit at any time without liability.
