by Kate Watkinson Wright
Q: What is an “independent contractor” and what are the risks of using one?
A: An independent contractor is a worker providing services through an independently established business, free from direction and control of an employer.
Independently established business: A worker should have a separate business location and business license, liability insurance, authority to hire and fire employees to perform the services, a significant investment in the business, and independent marketing efforts.
Direction and control: These practices include imposing workplace conduct requirements, discipline, requiring training, close supervision, or imposing a regular work schedule.
Risks: If your independent contractor does not meet these requirements and is deemed an “employee,” you may face back taxes, penalties, and interest assessments, and liability for wage claims under state and federal law.
Originally published in the Portland Business Journal.