Independent Contractors

Independent contractors

What's the difference between an employee and an independent contractor?

This can be an important question. Employees have rights and protection under the law that contractors do not.

In a recent case before the Employment Court it was held that the Employment Relations Authority can determine the real relationship between two parties regardless of how the relationship is described by the parties.

If your work relationship has all or most of the features listed below, you're probably an employee, and so covered by all the protections in the Employment Relations Act and other employment Acts:

• You and the person you're working for intended that you'd be an employee, as shown by any written agreement or letters or by how you and the other person behaved.

• The person you're working for (or their agent) controls the hours you work.

• The person you're working for (or their agent) has the power to hire and fire you.

• The person you're working for makes the profit or loss.

• The person you're working for deducts ACC premiums and PAYE tax on your behalf.

• The person you're working for supplies the materials you use for your work.

• The person you're working for owns or leases the equipment you use.

• You're required to work only for that person at the time, and it's expected you won't compete with them or offer to work for their competitors.