Employers commonly use independent contractors to meet specific needs and acquire certain skills or expertise in an area. The line can become blurred however when those services are needed more regularly, or employers become overly dependent on them and begin to treat them as an employee.
Independent contractors are not considered employees under the Oklahoma Workers’ Compensation law. To help determine whether someone is an employee or an independent contractor, for the purposes of workers compensation, there are several factors to consider.
Each of the items listed below is reviewed together. No single item is necessarily definitive.
Areas of Consideration:
- Is a contract in place outlining the scope of the work to be performed, identifying the type of work, a start date, and an end date? Is the overall cost of the job included?
- Does the contractor work alone, or do they have helpers or employees that are utilized in the course of their work?
- The greater degree of control applied over the worker increases the probability that the worker is an employee.
- Consideration is given to whether a worker works solely for a business or operates a trade for multiple companies.
- Is the work done under the direct supervision of an employer or performed by a specialist unsupervised.
- Does the work require special skills, education, or training? If so, this could potentially indicate the worker is an independent contractor.
- If the worker supplies all their own tools, supplies, materials, etc. it may indicate they are an independent contractor.
- Will the job be performed once, or it is something that will be ongoing?
- Consideration is given to whether the work done is a regular part of the business or separate and hired on an as needed basis.
- What the business and worker consider the relationship to be, employee or independent contractor.
- Whether or not either party can end the relationship without liability.
General or primary contractors may be held responsible for work-related injuries of those subcontractors working for them if they do not have their own coverage.
For any additional questions or information please reach out to our audit department at (405) 232-7663 ext. 5528 or email at premiumaudit@compsourcemutual.com.
