What can an employer do to minimize the risk that independent contractors will be considered employees for wage and hour purposes?

September 14, 2007

There are several steps an employer can take to increase the likelihood a worker will be considered an independent contractor, not subject to minimum wage and overtime laws:

• Enter into a written contract with a beginning or ending date or which specifies a certain amount of work to be performed.
• Do not pay the independent contractor by the hour or with a salary. Require the contractor to submit an invoice and pay on a per-piece or project basis.
• Do not have employees perform the same work as the independent contractor.
• Do not provide tools, supplies or equipment for the independent contractor.
• Do not require the work to be performed in any specific way. Look at the results obtained, rather than the process.
• Make sure the independent contractor performs skilled work.

This information is adapted from Ceridian's HR Compliance Reference System. Contact your Ceridian representative for more information about Ceridian's compliance solutions.