Home Health & Hospice Week

Degree of control is key.

If you’re claiming workers are independent contractors but they don’t stand up to the Department of Labor’s “economic realities” test, you’d better change your practices before they bring you big fines and back wages payments.

According to a DOL Wage and Hour Division Fact Sheet from 2008, those factors are:

1. The extent to which the services rendered are an integral part of the principal’s business.
2. The permanency of the relationship.
3. The amount of the alleged contractor’s investment in facilities and equipment.
4. The nature and degree of control by the principal.
5. The contractor’s opportunities for profit and loss.
6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
7. The degree of independent business organization and operation.

Note: The fact sheet is at www.dol.gov/sites/dolgov/files/WHD/legacy/files/whdfs13.pdf. IRS independent contractor information is at www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-defined.