Classifying Internet Workers: Employee vs Independent Contractor

different types of employees

This post is part of a series of posts entitled A Legal Guide to the Internet. For a comprehensive list of articles contained in this series, click here.

To determine how the law of the Internet applies to employees, one must first determine whether an individual is an employee. There is not always an obvious answer to this question, and the issues can become complicated.

What Are Employees?

Basically, employees are a kind of agent. All employees are agents, but not all agents are employees. There are two essential characteristics that distinguish employees from agents. First, an employee must be a human being as compared to artificial or electronic agent. Second, an employer has more control over an employee than over an agent. An agent typically has its own facilities and is independent. Also, an agent’s services usually are in the nature of a single transaction, and not part of a continuing relationship.

What Are Independent Contractors?

Employees are distinct from independent contractors. An independent contractor is not an employee, and therefore an employer’s liability for independent contractors is much more limited than that for employees. A worker is not an independent contractor simply because they are called an independent contractor. An improper classification of an employee can be costly. The key in determining whether a worker is an independent contractor or an employee is the degree of control a company exercises (or has a right to exercise) over the worker’s performance of the work. The more control exercised, the more likely the worker will be considered an employee. The less control exercised, the more likely the worker is an independent contractor. JUX provides a helpful overview of how to determine whether a worker is an employee or independent contractor.

This and the following posts have been copied or adopted from A Legal Guide To The INTERNET – Sixth Edition, published through a collaborative effort by the Minnesota Department of Employment & Economic Development and Merchant & Gould.