Understanding Whether You Have Hired An Employee Or Independent Contractor
You may think that all you need to determine whether a person who serves your business is an independent contractor or an employee is a mutual agreement with that individual. Even if you capture your agreement in a written contract, you could find that your arrangement is not held up in a court of law.
Say, for example, that you hire someone who you believe is an independent contractor. That person gets injured on the job and is unlicensed. In the state of California, for a subcontractor to be considered an independent contractor he or she must be licensed in accordance with Chapter 9 of Division 3 of the Business Profession Code. Consequently, you could end up paying workers’ compensation for that person, even though you had a written agreement that stated that person was an independent contractor.
Since not all industries work like the construction industry, and California regulations differ from those in other states and federal regulations, it is important for you to understand which tests a court will use to determine if a person is your independent contractor or your employee. A few of those tests are:
- Did you have the right to direct or control that person? Even if you never exercised that right, if you had the ability to control the person he or she will be qualified as your employee.
- Did the person choose the benefits and burdens of being self-employed of his or her own volition?
- Did the person bring his or her own equipment and supplies and does he or she have a place of work separate from yours?
- Did the person have the right to hire and fire others?
So you can best protect your business and your employees, contact Hoffman Brown Company. Located in Sherman Oaks, California, we are here to meet all of your commercial insurance needs. Properly protect all of your hard work; call us today!