If you enter into a contract to perform specific work for an employer, and you perform the work according to your own process and outside the daily control of the employer, you are an independent contractor. Independent contractors are not considered employees; they are self-employed, and do not receive most of the rights and benefits that employees receive from employers or by virtue of federal and state employment laws, particularly the Fair Labor Standards Act. However, civil rights law does apply to independent contractors in their relationship to employers. If you are an independent contractor, you may be called freelancer or consultant.
Unlike an employee, if you are an independent contractor, you negotiate with each employer the terms of your work assignment, and you are considered the owner of your work. For example, if you are a writer working as an independent contractor, you retain the copyright to your work even after delivering it to the employer, unless you explicitly sign away the copyright.
As an independent contractor, you will be paid according to the terms of your agreement, not according to the regularly scheduled payroll. You are responsible for paying all applicable federal, state and local taxes from the income you receive. One of the biggest problems independent contractors face is getting paid.
While you may have a written agreement, it is usually obvious if you are an independent contractor; however, there are some situations in which an employer will classify a worker as independent contractor in order to avoid paying the benefits that employees receive. In such cases, you may actually be an employee. In general, if you feel you are being treated like an employee, you may be one. Ask the following questions about the work you are agreeing to do:
Who controls the style, content, creation and completion of the work, you or the employer?
Are you permitted to subcontract any of the work for this employer, or must you do all the work yourself?
Are the terms of performance negotiated by you and the employer (salary, due dates, hours, etc.), or are they dictated by the employer?
Is the work you are doing an integral part of the employer’s overall business, rather than a discrete project?
Do you work at home or from a remote location or does the employer maintain an office for you that you must use in doing your work?
Do you provide and control the necessary tools to complete your work, or does the employer?
Is the work temporary or long-term/permanent?
Does the work require special skill or is it routine work that a typical employee might do?