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Independent Contractor versus Employee

The distinction between an independent contractor and employee is not always clear. Legally, it is important for at least two reasons: first, an employer is usually not responsible for any FICA or unemployment taxes for compensation paid to an independent contractor; and, second, an employer is generally not vicariously liable for wrongs committed by an independent contractor in the scope of the contractor’s work.

When considering whether someone is an independent contractor or employee, numerous factors are considered, including but not limited to: (1) instructions, (2) training, (3) integration, (4) services being rendered personally, (5) hiring/supervising, (6) set hours of work, (7) where the work is performed, (8) realization of profit/loss, (9) who supplies the tools of the trade, (10) working for more than one company at a time and (11) the right to terminate/discharge. Travelers Equities v. Div. of Emp. Sec., 927 S.W.2d 912 (Mo. Ct. App. 1996).

Importantly, if there is an agreement that someone is an independent contractor or employee, that is not binding on a Court. A court can legally determine whether someone is an employee or independent contractor regardless of the agreement of the parties.