Are My Workers Employees or Subcontractors? - Youngblom Consulting

Are My Workers Employees or Subcontractors?

Whether a worker is classified as an employee or a subcontractor depends on the nature of the work relationship. In general, employees are considered to be "hired" by the business, while subcontractors are considered to be self-employed and provide services to the business on a contract basis.

Here are some factors that may be considered in determining whether a worker is an employee or a subcontractor:

  • Who controls the manner and means of the work? Employees generally have less control over how and when they perform their work, while subcontractors typically have more control.

  • Is the work part of the business's regular operations? If the work is a regular part of the business's operations, it is more likely that the worker is an employee.

  • Is there a written contract? A written contract can help clarify the nature of the work relationship, but it is not the only factor to consider.

  • Is there a long-term relationship? A long-term relationship between the worker and the business may indicate an employee relationship, while a short-term or project-based relationship may suggest a subcontractor relationship.

It is important to correctly classify workers as employees or subcontractors, as this can have significant legal and tax implications for both the business and the worker. If you are unsure about how to classify a worker, it is a good idea to seek guidance from an attorney or a tax professional.