Common Questions about Independent Contractors
Many businesses that contract with individuals or businesses for goods or services are unaware of the potential liability that may arise under the contract. Under certain circumstances, the individual or business rendering goods or services to a business may actually be classified under Florida law as an employee, not an independent contractor, which may lead to a windfall of liability for the business when something goes wrong. It is important for a business to work with a competent business law attorney to ensure that it limits its liability when hiring contractors to perform any task.
What does it mean to be an independent contractor?
An independent contractor is not an employee of a business although at times it may appear that way. Rather, an independent contractor is hired by a business to provide goods or services.1 The goods or services are provided according to the terms of the contractor’s agreement with a business.2
Is an independent contractor self-employed?
Yes, an independent contractor is self-employed.3 Generally, a business owner or contractor who provides services to other businesses are considered self-employed.4
What are the benefits of using an independent contractor?
Generally, an employer is liable for any action taken by an employee if such action occurs within the scope of that employee’s employment. By contrast, an employer is generally not liable for the actions of an independent contractor.
It is in a business’s best interest to consult with a business law attorney before hiring a contractor for any major task. Although the contract on its face may deem an individual or business an independent contractor, an employer can still take certain actions before and after hiring an independent contractor that can actually nullify the contract’s effect.
What does Florida law look for when determining the status of a contractor?
Florida courts apply numerous factors to determine whether the individual or business is an independent contractor or employee. Most of these factors revolve around whether the employer had some type of control over the contractor and whether the contractor exhibited a substantial degree of independence.
Why is it important to consult with a business law attorney?
No two cases are alike and courts will determine liability on a case by case basis. It is imperative that a business owner takes preventative measures in both the screening and hiring process. For example, certain steps must be taken to ensure that the contractor a business hires is duly qualified. Further, the contract between a business and a contractor must be fashioned in a way as to limit the business’s liability. Lastly, an employer must not take certain actions while an independent contractor is performing.
The Law Office of Knellinger, Jacobson & Associates understands the needs of business owners in North Central Florida. We have helped business owners for over 40 years protect their businesses from liability. We are knowledgeable about agreements with contractors and we are here to assist your business with this process.
1. Communications Workers of America, My Employer Says I am an Independent Contractor. What Does This Mean?, http://www.cwa-union.org/pages/my_employer_says_i_am_an_independent_contractor.what_does_this_mean (last visited Dec. 23, 2015).
3. Internal Revenue Service, Independent Contractor Defined, https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Defined (last updated Aug. 5, 2015).
4. Internal Revenue Service, Independent Contractor (Self-Employed) or Employee, https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee (last updated Aug. 5, 2015).