• Independence

    When working out whether a worker is an employee or contractor, one factor to consider is whether the worker is operating independently of your business.

    Worker is not operating independently of your business

    This is a characteristic of an employee.

    The worker is not operating independently of your business if they work within and are considered part of your business. That is, there is only a single business being operated (your business).

    Example

    A hotel has room attendants clean and vacuum as well as dealing with housekeeping requests.

    The room attendants:

    • wear a uniform with the hotel's logo and a name badge
    • were provided with training by the hotel in how their duties needed to be carried out to meet the hotel's standards
    • work specific hours and as part of a team to ensure the rooms are made up before the hotel's check in time
    • need to do any duties reasonably asked of them (within their job description) by the hotel.

    The room attendants are not operating independently of the hotel as they work within and are part of the hotel. That is, the hotel is the single business being operated.

    End of example

    Worker is operating independently of your business

    This is a characteristic of a contractor.

    The worker is operating independently of your business if they are operating their own business.

    The worker performs services as specified in their contract or agreement and is free to accept or refuse additional work.

    Example

    A hotel offers a range of services to its guests, including in-room massage. The hotel enters into an agreement with a massage therapist to perform the massages for their guests.

    If a guest requests a massage, the massage therapist uses their own table, oils and so on to provide the massage in the guest's room.

    The client may either pay the massage therapist directly or add the cost to their room account, in which case, the hotel takes out a service fee before passing on the net amount to the massage therapist.

    The hotel vetted the massage therapist before allowing them to conduct their business on their premises, but as specified in their agreement takes no responsibility for any negative outcome for the guest or massage therapist.

    The massage therapist does massages at other hotels and can also visit clients in their own homes. They are free to refuse work the hotel offers.

    The massage therapist is operating independently of the hotel as the massage therapist:

    • is operating their own business, independently of the hotel
    • performs services as specified in their agreement and is free to accept or refuse additional work.
    End of example

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    Last modified: 06 Jan 2017QC 33179