Are You an Employee or an Independent Contractor? The Answer May Surprise You

Do you know if you’re an employee or an independent contractor? It seems like something you should automatically know when you’re hired, but the question comes up more often than you’d think. The confusion often arises when the terms of hire or the expectations from the employer are ambiguous or *shudder* not written down. And there are real consequences to not knowing whether you’re an employee or a contractor: it can affect whether you are eligible for employee-sponsored insurance, whether your employment is temporary, and for artists, whether or not you own rights in the work you’re hired to create.

This distinction between employeehood and contractorship is the foundation of the “work for hire” doctrine. On its face, “work for hire” simply deals with who owns rights in the work made by an employee. But understanding that distinction when put into practice can actually be pretty hard, which is why I think most people don’t truly understand “work for hire.” In short, if you’re an employee, it is generally understood that the employer will have the right to own your work. That is, after all, why you were hired to begin with. If on the other hand, you’re an independent contractor, it gets more complicated; you may have rights in your work… or you may not. It depends on a variety of factors that I won’t use this space to occupy. Instead, I wrote a primer on “work for hire” several years ago which you can review here.

So knowing the difference between “employee” and “contractor” is critical. But like most things in the law, there isn’t a single unified definition of either term. Instead, to tell the difference, you need to look at different factors (the federal courts love multi-factor tests) to determine which category you fall into. What are those factors? I’m so glad you asked.

Now you can look at these lists and say “Duh Greg. These are pretty obvious. Why do I need this blog post to tell me what I already know?” Because in practice, employment doesn’t always read like one list or the other.

Let’s say you are hired by a production company to develop and produce a new television pilot. In your employment contract, the term of your employment is open-ended but you understand that it’s a temporary gig. You will bill the production company based on a delivery schedule you create, but the work will require a lot of onsite participation, which means spending time both at the filming location as well as the production company’s office working with other employees on editing, music, and color correction. Your work schedule is not your own. You will not receive any other benefits and the agreement is silent on ownership over the work. In this scenario, do you look more like an employee or a contractor? If you said the latter, you are probably correct, but if you found those terms to make your employment status unclear, you would have a compelling argument.

Luckily, there’s a really simple way around this possible ambiguity… just say which one you are! In your employment contract, make sure that it states clearly whether you are an employee (it will probably say you are an “at will employee”) or an independent contractor (in which case, the agreement will probably have language like this: “nothing in this agreement shall be construed by either party to create a permanent employer-employee relationship.”). To make matters easier, you can side-step the whole “is this a work for hire?” question by clearly stating which party will own the rights to the work when it’s completed. And yes, if you find employment terms to be unclear, you can ask the the employer to clarify those terms or you can submit revised language yourself.

My point is this: don’t just assume you’re an employee or an independent contractor. Ask the employer. It will save you lots of time and angst (and probably money) down the road if you know what you’re getting into when you’re getting into it.