The FLSA considers workers to be independent contractors if they’re economically independent from the business. How can you tell if they are economically independent? The following questions must be considered:
• Does the company have the right to control how the individual performs the work, as opposed to simply accepting or rejecting a final product? The more the company controls the way the work is done, the more the worker looks like an employee.
• Does the worker have an opportunity for profit and loss? If the worker bears the economic risk of doing business, then that is a factor in favor of independent contractor status.
• Does the worker have any investment in equipment and facilities? The greater the investment, the more it appears that the worker is an independent contractor.
• Do the worker’s services require special skills? The more specialized the skills, the more likely it is that the worker is an independent contractor.
• How permanent is the relationship between the company and the worker? A long-term relationship— especially one that lasts for a year or more— is a factor in favor of employee status.
• Are the worker’s services an integral part of the company’s business? If so, it’s more likely that the worker is an employee. For example, someone who works for a drugstore as a pharmacist would probably be considered to be an integral part of the business.