North Carolina Independent Contractors laws & compensation compliance analysis

North Carolina 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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In North Carolina and elsewhere, the most important or significant consideration in determining employee or contractor status is the fundamental question of control. Conversely, the lack of the employer's right to control the mode of doing the work is the primary consideration in bona fide independent contractor status. According to the North Carolina Supreme Court (Hayes v. Board of Trustees, 224 N.C. 11 (1944) and McCown v. Hines, 353 N.C. 683 (2001)), an independent contractor is a person who:
• Is engaged in an independent business, calling, or occupation;
• Uses special skill, knowledge, or training in the execution of the work;
• Does a specified piece of work at a fixed price or for a lump sum or on a quantitative basis;
• Is not subject to discharge because he or she adopts one method of doing the work rather than another;
• Is not in the regular employ of the other contracting party;
• Is free to use such assistants as he or she may think proper;
• Has full control over such assistants; and
• Selects his or her own time to work.
An individual is not an employee covered by unemployment compensation if, under the usual common-law rules applicable in determining the employer-employee relationship, he or ...

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North Carolina Independent Contractors Resources

Type Title
Checklists Summary of IRS 20-Factor Test
Forms Model Client-Independent Contractor Agreement
See all Independent Contractors Resources