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Texas Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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Texas's workers' compensation law defines an independent contractor to be a person who contracts to perform work or provide a service for the benefit of another and who ordinarily:
• Acts as the employer of any employee of the contractor by paying wages, directing activities, and performing other similar functions characteristic of an employer-employee relationship;
• Is free to determine the manner in which the work or service is performed, including the hours of labor or method of payment to any employee;
• Is required to furnish or to have employees, if any, furnish necessary tools, supplies, or materials to perform the work or service; and
• Possesses the skills required for the specific work or service (TX Labor Code Sec. 406.121).
Employment covered by the Texas unemployment compensation law is defined as service performed by an individual for wages or under an express or implied contract of hire, unless it is shown that the individual's performance of the service has been and will continue to be free from control or direction both under the contract and in fact (TX Lab. Code Sec. 201.041). By implication, an independent contractor would be a person whose services do not meet the above test. ...

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More on this topic:

expand-collapse sectionEmployee or Independent Contractor?
expand-collapse sectionWorkers' Compensation Issues
expand-collapse sectionUnemployment Compensation Issues
expand-collapse sectionAdditional Information

State Requirements

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Texas Independent Contractors Resources

Independent Contractors Products

Employee vs. Independent Contractor Webinar Recording
BLR Webinar: "Employee vs. Independent Contractor: Where’s the Line? How to Make the Proper Call and Stay Out of Court""
Employee vs. Independent Contractor Webinar Recording
BLR Webinar: "Employee vs. Independent Contractor: Where’s the Line? How to Make the Proper Call""
Exempt or Nonexempt Webinar Recording
BLR Webinar: "Exempt or Nonexempt? Determining Employee Classification and Overtime Compensation""
Exempt vs. Nonexempt Webinar Recording
BLR Webinar: "Exempt vs. Nonexempt: How to Find and Fix Misclassification Mistakes""
Exemption Audits Webinar Recording
BLR Webinar: "Exemption Audits: Prepare Now for Stepped-Up DOL Enforcement""
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

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