Determining whether a worker is an employee or independent contractor is critical when it comes to questions of pension eligibility, workers' compensation, wage and hour coverage, and a number of subordinate legal issues. In some situations, federal law will govern, but the question is often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
Employee. Under Idaho Code Title 72, "employee" is defined as any person who has entered into the employment of, or who works under contract or service or apprenticeship with, an employer. An employee typically has the following characteristics:
• Performs duties dictated or controlled by others;
• Undergoes training for the work to be performed;
• Works for only one employer;
• Works a schedule required by the employer; and
• Is subject to direct supervision by the employer.
Independent contractor. Conversely, "independent contractor" is defined as "any person who renders service for a specified recompense for a specified result, under the right to control or actual control of his principal as to the result of his work only and not as to the means by which such result is accomplished." Essentially, an independent contractor is a worker who provides goods or services to another entity under the specific terms of a contract. Generally, an independent contractor has the following characteristics:
• Operates under a business name;
• Has his own employees;
• Maintains a separate business checking account;
• Advertises his business services;
• Invoices the employer for work completed;
• Has more than one employer;
• Keeps business records;
• Controls his own ...