{"attribution":{"source":"legal.exploreworldai.com","canonical":"https://legal.exploreworldai.com/api/public/v1/topic-graph/us/employee-vs-contractor","cite_as":"NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/topic-graph/us/employee-vs-contractor)","license":"https://legal.exploreworldai.com/revision","version":"legal-2026-11-03","fingerprint":"ewai:us:83be35","proof":"sha256:1b6aa63944f041b37b9c19bdef4008eaf52197a8d56ad5d78bff006764fa536d","jurisdiction":"us","lang":"en"},"brand_source":"Source: NovaCopilot","id":"topic:us:employee-vs-contractor","object_type":"topic","schema_version":"1","jurisdiction":"us","title_en":"Employee or independent contractor?","short_answer_en":"A worker is an employee if they are economically dependent on you; the label in the contract does not decide it.","law":{"title":"Fair Labor Standards Act, 29 U.S.C. 203; 29 CFR Part 795","source_url":"https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title29-section203"},"chain":{"elements":[{"id":"topic:us:employee-vs-contractor#element-1","label":"Worker performing services for pay"},{"id":"topic:us:employee-vs-contractor#element-2","label":"Economic dependence on the business"},{"id":"topic:us:employee-vs-contractor#element-3","label":"Control over how the work is done"}],"obligations":[{"id":"topic:us:employee-vs-contractor#obligation-1","duty":"Assess each worker under the economic reality factors: profit or loss opportunity, investment, permanence, control, integral work, skill","cite":"29 CFR 795.110"},{"id":"topic:us:employee-vs-contractor#obligation-2","duty":"Pay employees at least minimum wage and overtime","cite":"29 U.S.C. 206–207"},{"id":"topic:us:employee-vs-contractor#obligation-3","duty":"Withhold and pay payroll taxes for employees","cite":"26 U.S.C. 3102, 3402"}],"sanction":{"id":"topic:us:employee-vs-contractor#sanction-1","text":"Back wages plus an equal amount in liquidated damages, and back payroll taxes with IRS penalties.","cite":"29 U.S.C. 216(b); 26 U.S.C. 3509"},"compliance":["Written classification analysis per role","Contractors invoice and set their own methods","No contractor doing core, permanent work","Review when duties change"]},"next_questions":[{"id":"topic:us:employee-vs-contractor#q:is-this-person-a-contractor","question_en":"Is this person a contractor?","answer_en":"Only if they run their own business: they can profit or lose, invest in tools, set how the work is done and are not permanent. 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