The law provides a number of guidelines for what makes someone an independent contractor, rather than an employee. Generally, if you have the power to control the manner in which a worker does his or her job, then that person is likely an employee.

If, however, you have little or no control over how the employee does the job, then it is likely that the person is an independent contractor. The line between employee and independent contractor can be blurry, however, and it is extremely important that you take certain precautions in hiring an independent contractor.

As an employer, your obligations to an independent contractor are somewhat different than those that you have to your employees.

Why Might I Hire an Independent Contractor?

There are some advantages to hiring an independent contractor as opposed to a new employee. For instance, you can save money since you will not have to pay benefits or employment contributions. Additionally, independent contractors cannot sue for various employment-related claims such as discrimination or family and medical leave. Finally, contractors can be particularly useful if you need a specific project completed.

When Can I Be Sued By an Independent Contractor?

As an employer, you have a duty to maintain a safe work environment with adequate tools or instruments for the job if the contract specifies that you will provide them. Your duty of care is normally lower when you have contracted to have repairs done to a specific job site.

Courts will usually hold employers liable where they have hired an independent contractor to do work that is likely to create a risk of harm (such as construction) and where the employer has:

  • Failed to include in the contract that the independent contractor must take precautions to protect against that risk; or
  • Failed to exercise reasonable care in taking precautions to protect against that risk

Additionally, an independent contractor might sue over ownership of creative work. If you are hiring someone to create something for you, they will own it unless it contractual agreement provides for the contrary through a work-for-hire agreement or a licensing agreement.

What Precautions Can I Take When Hiring an Independent Contractor?

Employing independent contractors requires that you take certain precautions to protect yourself from liability and maintain a smooth employment relationship.

The contract that you and the independent contractor create is one of the best ways to protect yourself from liability, and should include provisions for the following:

  • Services to be performed and the expected time period for those services to be completed
  • Payment
  • Reporting
  • Confidentiality obligations, which may include a non-disclosure agreement
  • Warranties
  • Any restrictions or specifications regarding subcontractors

Should I Contact an Attorney?

If you have become involved in a dispute with an independent contractor that you have hired, you should contact an attorney immediately who has experience in business and/or contract law.  An experienced contract attorney will not only be able to represent you in any actions brought against you, but can also help preserve and protect your rights as an employer.