Employee or independent contractor?
Published on
June 16, 2026
Why is it important to know whether the person who works for you is an employee or an independent contractor? Because the answer determines whether they must be covered by your workers’ compensation policy.
So how can you tell?
Anyone who performs work for you is an employee, unless they:
- Are free from control and direction in the performance of the service.
- Are customarily engaged in an independent trade, occupation, profession or business related to the service provided.
- Have no workers.
How to determine whether the individual is an independent contractor
Questions to ask:
- Is the individual free from your control or direction?
- Is the individual “engaged in an independent trade, occupation, profession or business”?
- Does the individual:
– Have a business name?
– Carry business insurance?
– Offer this service to any other business?
– Submit invoices?
– Supply the tools and vehicle?
– Work alone? - Are the payments made to the business name?
- Is the individual paid by a contract rate?
If you answer YES to ALL the questions above, the individual most likely is an independent contractor,
meaning you would not be required to cover them under your workers’ compensation policy.
Still unsure?
It’s a good idea to be certain. Discuss the facts with your agent, underwriter or auditor. You can submit
the contracts held between you and the individual to your agent, underwriter or auditor to confirm
independent contractor status.
