An employee is a person who provides work to an employer on a full-time basis and the employer has control over the employee’s conduct. An example of an employee would be a person working as a salesperson in a hardware store.
An independent contractor is a person who provides work on a more intermittent basis. Examples of an independent contractor would be a consultant, freelance workers, or one who is self-employed.
What Factors Are Used to Identify Employees v. Independent Contractors?
One of the most common factors used to identify whether a person is an employee is whether the employer has control over what the employee does and how it will be done. Other factors include if the employer follows the appropriate laws by paying Social Security, Medicare, withholding income taxes, paying for unemployment, and paying at least minimum wage and overtime wages.
A wide variety of factors help to identify a party as an independent contractor. Support for an independent contractor can be found if there is limited control over the worker’s conduct. Additional factors are if the worker provides their own equipment to complete the work and if the worker is free to compete in the open market to find additional work.
What Is Vicarious Liability?
Identifying a party as employee or independent contractor is extremely important to an employer when it comes to the concept of vicarious liability. Vicarious liability is a legal theory wherein one is deemed responsible for the acts of a third party. Employers are vicariously liable for the negligent acts or omissions committed by their employees in the course and scope of their employment. An injured party can then seek to recover for their damages and losses from the employer based on an employee’s act.
By contract, as a general rule, employers are not liable for the acts of independent contractors unless the work is "inherently dangerous activity."
What Is an "Inherently Dangerous Activity"?
In some cases, an employer will be found liable for the acts of an independent contractor if the work is an "inherently dangerous activity." Examples of this type of activity would be work transporting or handling explosive materials, blasting land to construct roads or buildings, and dealing with wild animals.
Due to the increased likelihood for injury and the specialized nature of these activities, an employer will be found liable for these types of acts even if carried out by an independent contractor.
Should I Consult an Attorney?
If you have become involved in a liability issue where you are the employer, employee, or independent contractor contact an attorney right away. An employment attorney can help to protect your rights and represent you in a cause of action brought against you.