The courts distinguish between an employee, defined in s.248(1) of the Income Tax Act, hereafter, ITA, as the “position of an individual in the service of some other person”. An independent contractor, is someone with a “contract for service.” The case that considered an employee versus and independent contractor was Wiebe Door Service Ltd. v M.N.R. In this case, the applicant owned a door instalment business and had a number of contractors that worked for them. The contractors were responsible for their own taxes, workers compensation and unemployment insurance. However
New Jersey courts define an independent contractor as one who “contracts to do a piece of work according to his own methods, and without being subject to the control of his employer as to the means by which the result is to be accomplished, but only as to the result of the work.” Cappadonna v. Passaic Motors, 136 N.J.L. 299, 300, (Sup. Ct. 1947), aff'd, 137 N.J.L. 661 (1948). There are two tests used to determine whether an employee was an independent contractor: (1) the control test and (2) the relative nature of the work test.
An independent contractor is defined as someone who is contracted to perform a job. The person whom is performing the job will perform by their own means and on their own time, as long as it falls within the time
The Texas Workforce Commission uses a 20 point comparative approach to define employment status with one sentence describing an employee and one for describing an independent contractor under each category. One of the main differences between the two are a person is an employee if the
The parties agree and understand that Contractor is an independent contractor for all purposes and is not an employee of Company. No rights or benefits of employment apply to the relationship between the parties. The parties also agree and understand that the Contractor controls the means and methods of performance under this Agreement. Neither the Company, nor any of its representatives, has
However, if a person is self-employed they still have protection for their health and safety and, in some cases, protection against discrimination, and their rights and responsibilities are set out by the terms of the contract they have with their client.
Self-employed people will run their own business, they will be contracted to provide a service their clients. They will not be paid through PAYE and they do not have the same employment rights as employees or workers, Self-employed people will however still have protection for their health and safety on a client’s premises, they will have their rights and responsibilities set out in the terms of the contract with the client. They will not be entitled to holiday pay. They may however in some cases be classed as self-employed for tax purposes but classed as an employee or worker for employment rights. See point 2 Appendix
A master has a right of control on how a servant should carry out his duties. This right does not exist in the case of an independent contractor or possibly in the case of an agent. Note however that this control test in relation to servant, agent and independent contractor has been criticized to distinguish between the position of an agent and that of a servant. The essential distinction between an agent, servant and independent contractor is one of function. An agent is engaged to make contracts and to dispose the property of the principal. Truly, the duties can overlap in a single situation. This is because a single person can act both as a servant and an agent while being an independent contractor. A single person may perform the duties of these 3 categories.
Employers should make it clear that they do not have a monopoly on a contractor’s services, and they do not expect loyalty such as they might from an employee. A contract may state specifically that the person providing services is an independent contractor, but it does not guarantee the classification. Still, the terms of the contract can be helpful in identifying the relationship.
Yes. The principal test of a principal-independent contractor relationship is whether the hiring party has the right to control the means in which the result is accomplished. A court would most likely find that Acol is an independent contractor because she has the overall control over her own working schedule, the prices, and how she
Self employed - if you are not employed in a contract of employment with an employer but contracted to provide services other a period of time for a fee or be a business in your own right. Therefore a person will work for themselves rather than a employer. You do not have employment rights but have to pay your own income tax and national insurance contributions.
It is highly unlikely that large employers will try to reduce health insurance costs by converting employees to contractors, as misclassifying employees as independent contractors can incur major penalties. The IRS has very specific guidelines regarding who can be considered an independent contractor. The IRS has also been cracking down on the misclassification of independent contractors.
An independent contractor is ”people who truly have their own businesses and are their own bosses”, while an employee is paid by the company and entitled to other benefits (i.e. medical/dental, pension, vacation, sick days, life insurance, etc.)