Employee or Independent Contractor Guide

Employee or Independent Contractor Guide

Kentucky’s Supreme Court has developed a test to determine whether a person performing a service for your business is an employee or an independent contractor. The test consists of the following six factors:

  1. The permanency of the relationship between the parties,
  2. The degree of skill required for rendering the service,
  3. The worker’s investment in equipment or materials for the task,
  4. The worker’s opportunity for profit or loss, depending upon his or her skill,
  5. The degree of the alleged employer’s right to control the manner in which the work is performed, and
  6. Whether the service rendered is an integral part of the alleged employer’s business.

If analysis of these factors reveals the employee is economically dependent upon the alleged employer’s business, he or she is an employee and not an independent contractor. Stated differently, the workers’ compensation system is designed to spread the cost of work-place injuries and diseases to consumers as a portion of the purchase cost of the product or service. If the person performing the service for the business does not have an independent opportunity to pass that cost to the consumers of his or her services, that person is an ​employee and not an independent contractor.

For questions regarding coverage and compliance, contact Scott Gasser at Scott.Gasser@ky.gov or LaborKYWCCompliance@ky.gov

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