Uber and Lyft ride-sharing has finally begun in British Columbia, and with a cohort of new independent contractors now on the road, you might be wondering: what is the difference between an independent contractor and an employee?
Here are some differences that define independent contractors separately from employees, in the eyes of the law:
1. If you own your own equipment
Do you own the tools, machinery and/or equipment necessary to run your business? If you own and operate all of your own equipment, you may be considered an independent contractor. In the case of Uber and Lyft drivers, this includes your vehicle.
2. If you are in control of your schedule and jobs
If you are the one controlling when, where and how a job is done, you may qualify as an independent contractor. If you are in complete control of a project or a job and have been hired to execute with full trust, you may be an independent contractor.
3. If you pay your own expenses
Do you pay your own expenses out of the expected compensation from a job? If so, you may be considered an independent contractor.
How to know if you are an independent contractor or an employee
You are likely an employee if:
- You receive instruction on how to work
- You receive job training
- You work set hours
- You primarily work at a location mandated by your employer, either on-site or off-site
- You have one employer
- You report on the results of your work
- You receive compensation on a set schedule
- Your work-related expenses are reimbursed by your employer
- Your work tools are provided by your employer
You may be an independent contractor if:
- You primarily without direction from a supervisor
- You are expected to perform your work without training
- You are not personally expected to perform the work
- You were hired for a set time period, or for a specific project
- You set your own hours
- You have several employers at once
- You can determine your own work location
- You can decide how to conduct the work without direction
- You provide your own tools and supplies
- Your work expenses are not reimbursed
- You are paid on a per-job basis or you invoice your hours
There are also several tax considerations that an independent contractor should be aware of, so it is important to consult with an accountant as well.
If you are unsure whether you qualify as an independent contractor, our small business lawyers can help you determine your employment status.