Independent Contractors Definition
An independent contractor is an individual who provides services to another party under a contract between the two. The independent contractor is not an employee of the company they are contracted with, and therefore is not subject to the same rules and regulations as employees. Independent contractors are usually responsible for their own taxes and benefits, and often work from home or another location outside of the company’s office.
The definition of an independent contractor can vary depending on the jurisdiction, but there are generally three key factors that must be met:
1. The individual must be free from control or direction over their work. This means that they are not told how to do their job, when to do it, or where to do it. They are also not given any training by the company they are contracted with.
2. The individual must be performing work that is outside of the usual course of business for the company they are contracted with. For example, a plumber would be an independent contractor hired by a construction company, as plumbing is not part of the construction company’s usual course of business.
3. The individual must be working for themselves – they are not an employee of the company they are contracted with. This means that they are not entitled to any employee benefits such as vacation pay or health insurance.
