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FAQ – Independent Contractors

Who is an independent contractor?

Independent contractors are individuals that perform services for others under a contract, but who are not under the essential control or superintendence of the other person while performing those services.

If I have a written contract does that mean I am an independent contractor?

The existence of a contract—written or verbal—is one of the factors the Board uses to determine whether a worker is an independent contractor. However, the Board is required to consider additional factors, and having a contract will not, by itself, make an individual an independent contractor.

Does the Workers’ Compensation Board define independent contractor the same as the Maine Dept. of Labor or the IRS?

Each agency has a different definition of an independent contractor. Those definitions are governed by different state and federal laws, and court decisions. An individual can be an employee with respect to one agency and independent contractor for another. Businesses should contact each agency before workers start a job.

Is an independent contractor required to have workers’ compensation insurance?

No, however an independent contractor is required to have workers’ compensation insurance for any employees hired by the independent contractor.

Who determines whether a worker is an independent contractor?

The Maine Workers’ Compensation Board determines whether a person is an independent contractor for purposes of maintaining mandatory workers’ compensation insurance and/or claims by injured workers.

Can an employer and a worker agree the worker is an independent contractor?

No. The Workers’ Compensation Board is required to look beyond any written agreements or the intent of the parties to determine the nature of their relationship. An individual can enter into what he or she believes is an independent contractor agreement but that agreement may not meet the standards contained in the Workers’ Compensation Act to qualify as an independent contractor.

How can I find out whether I am an independent contractor?

Anyone may request that the Workers’ Compensation Board determine whether an individual or group of individuals are independent contractors by making a request to the Board. Applications for predetermination of Independent Contractor Status are available on the Board’s website at http://www.maine.gov/wcb/ (Maine Workers' Compensation Board) or by contacting Linda Larrabee at (207) 287-7071 or 1-888-801-9087.

If I am designated an independent contractor, does that apply for all the work I may perform?

No. If an individual performs services for different businesses or clients, he/she may be an independent contractor in one setting but an employee in a different setting.

What does the Board consider when deciding whether a person is an independent contractor?

1. Whether or not a contract exists for the person to perform a certain piece or kind of work at a fixed price;
2. Whether or not the person employs assistants with the right to supervise their activities;
3. Whether or not the person has an obligation to furnish any necessary tools, supplies and materials;
4. Whether or not the person has the right to control the progress of the work, except as to final results;
5. Whether or not the work is part of the regular business of the employer;
6. Whether or not the person’s business or occupation is typically of an independent nature;
7. The amount of time for which the person is employed; and
8. The method of payment, whether by time or by the job.

In applying these factors the Board may not give any particular factor a greater weight than any other factor; nor may the existence or absence of any one factor be decisive. The Board considers the totality of the relationship in determining whether an employer exercises essential control or superintendence of the worker.

 

If you don’t know all the responsibilities of being – or contracting with – an independent contractor, find out now so you can make the right decisions and avoid problems down the road.

 

For more information regarding the Insurance Coverage Unit, please contact Linda Larrabee at (207) 287-7071.