Regulatory authorities have identified a number of factors to determine whether your workers are independent contractors, but the primary factors are:
- The degree and extent or control you exercise over the worker;
- Whether the worker works for anyone else;
- Level of skill/training required;
- Intent of the parties; and
- Who supplied the tools and place of work.
If the worker supplies his own tools, he will more likely be considered an independent contractor. If your worker has complete control over how his work is performed and when it is performed, this will support independent contractor status. The longer the worker has worked for you, the more likely he will be considered an employee. The more skill and training the worker requires to perform his work, the more likely he will be considered an independent contractor. And, if you have a written agreement accurately describing the relationship, it is more likely that he will be considered an independent contractor.
And, don’t forget that Nebraska’s Employee Classification Act creates a presumption that all of your workers are employees unless you can show they are independent contractors and the worker is registered as a contractor. The state may assess fine of $500.00 for the first violation and up to $5,000 for repeat offenders.
Rest assured that if the government comes knocking, they will be much more interested in classifying your workers as employees than independent contractors. And, when the government shares with these workers the benefits to which they could be entitled, these workers will immediately consider themselves employees.