December 2020/January 2021   Volume 18, Number 6      

When is Someone an Independent Contractor — or Not?

The DOL has identified the following typical problems concerning the determination of independent contractor status:

  1. One of the most common problems is in the construction industry where contractors hire so-called independent contractors, who in reality should be considered employees because they do not meet the tests for independence, as stated above.
  2. Franchise arrangements can pose problems in this area as well. Depending on the level of control the franchisor has over the franchisee, employees of the latter may be considered to be employed by the franchisor.
  3. A situation involving a person volunteering his or her services for another may also result in an employment relationship. For example, a person who is an employee cannot "volunteer" his/her services to the employer to perform the same type service performed as an employee. Of course, individuals may volunteer or donate their services to religious, public service, and non-profit organizations, without contemplation of pay, and not be considered employees of such organization.
  4. Trainees or students may also be employees, depending on the circumstances of their activities for the employer.
  5. People who perform work at their own home are often improperly considered as independent contractors. The Act covers such homeworkers as employees, and they are entitled to all benefits of the law.

Where to Obtain Additional Information

For additional information, visit the DOL Wage and Hour Division Website:

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In this issue:

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Businesses Get Cited for COVID OSHA Violations

Gig Economy Gets Boost with Proposition 22 Win

DOL Publishes Proposed Rule to Redefine “Worker” Under FSLA

When is Someone an Independent Contractor — or Not?



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