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The first document you sign when starting a new job can affect how you are treated legally for years. Whether you’re an employee or an independent contractor will affect your income and tax, plus your safety net. An employee will generally be directed by the employer and will be given legal rights. An independent contractor will run their own small business and provide a service. This can be difficult to understand.
Identifying your true status
In most countries the court and labour offices will consider what the work looks like. There are three main areas they will consider:
•Control – Does the company dictate how you work? How many hours you work, what tools you use and how you complete the tasks. Employees will have specific instructions. Contractors will make their own decisions.
•Profit/Loss – Can you make a profit or loss based on your own business decisions? Contractors can employ others, set pricing and have other clients.
•Continuity – Will you be working regularly for the company? If you’re working full time with no end date it will look like you’re an employee even if you’re classed as a freelancer.
If the rider has to wear company clothes, work set hours and can’t refuse orders they will be performing like an employee.
Why it matters and what you can do
Employees will have a minimum wage, overtime, paid holiday, pension contributions and cannot be unfairly dismissed. Contractors will manage their own tax and insurance and generally won’t have any of these. Sometimes employers will choose to classify you as a contractor to save money. This is known as misclassification. This has become more common with the gig economy and apps connecting workers with short tasks. In several places such as in the European Union rules have been put in place that you will be assumed to be an employee if the platform controls the work.
If you feel that you’re being classified incorrectly try:
•Save a copy of your contract, messages and payments.
•Note who is setting your hours and how you complete tasks.
•Research what employee benefits you have locally.
•Speak to your labour office, trade union or legal aid group before signing or leaving.
Knowing your status will help you get paid and protected fairly.
Employee or Contractor? Know Your Rights and Benefits
1. Could NYC Drivers Become Amazon Employees?
Check out how a proposed New York law could change Amazon delivery drivers’ employment status.
2. Are You Being Paid Less Than Deserved?
Find out how 1099 contractor and W-2 employee classifications affect your wages and workplace rights.
3. Can Europe Balance Employee and Gig Rights?
Explore how European countries are balancing worker protections with the growing gig economy.
4. Can Gig Workers Claim Employee Protections?
Discover why Massachusetts’ highest court rejected classifying certain gig workers as independent contractors.
5. Why Are California’s Uber and Lyft Sued?
Uncover how California is challenging alleged driver misclassification and labor law violations.
