{"id":4790,"date":"2021-08-27T13:06:04","date_gmt":"2021-08-27T18:06:04","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/employment-law-and-human-resources\/worker-classification-guide.html"},"modified":"2024-06-06T05:41:51","modified_gmt":"2024-06-06T10:41:51","slug":"worker-classification-guide","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/worker-classification-guide.html","title":{"rendered":"Worker Classification Guide"},"content":{"rendered":"\n
\n \n
\n

Worker Classification Guide<\/h1>\n
\n
\n By Kimberly Lekman, Esq.<\/a> | Legally reviewed by J.P. Finet, J.D.<\/a>\n | Last updated\n
\n

Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Anyone you hire to do work for your business is either an employee or an independent contractor<\/a>. The difference matters when it comes to things like unemployment insurance, the minimum wage, overtime payments, taxes, and workers’ compensation<\/a>.<\/p>\r\n

For each of your employees, you must withhold income tax, social security tax, unemployment tax, and Medicare tax. But you do not have to withhold taxes on payments you make to your independent contractors. Independent contractors are self-employed and handle their income tax and self-employment taxes<\/a> independently.<\/p>\r\n

It can sometimes seem like there is a fine line between employees and independent contractors. But this guide can help you determine how to classify your employees.<\/p>\r\n

Independent Contractors vs. Employees<\/h2>\r\n

Independent contractors<\/a> are often self-employed business owners. They generally work how and when they choose. They sell their services to many businesses. Workers who perform tasks their own way, on their own time, with their own equipment, are more likely to be independent contractors.<\/p>\r\n

An employee<\/a> performs tasks when and how their employer tells them to. The more control you have over a worker, the more likely that the worker is your employee.<\/p>\r\n

There is not a specified set of requirements that creates an employee relationship. Instead, you must weigh the specific facts of your business<\/a> situation. Depending on the situation, some factors might carry more weight than others.<\/p>\r\n

To help determine whether your workers are employees or independent contractors, go through the following questions. Every \u201cyes" to one of the below questions inches you closer to an employee relationship. Every \u201cno" is a factor pointing toward an independent contractor<\/a> relationship.<\/p>\r\n

Do You Control How Your Workers Do Their Jobs?<\/h3>\r\n

If you manage<\/a> the way workers perform tasks, they are more likely to be considered employees. If the following factors apply to you, you probably control how your workers do their jobs:<\/p>\r\n