As a start up, one of the most important steps as an employer in the US, is the need to classify service providers with your company properly as employees or independent contractors. Misclassification leads to liability.
What is the difference between employees and independent contractors?
Independent contractors are free from:
–Supervision
–Direction
–Control in the performance of their duties
California’s ABC Test:
Under the ABC test, a worker is considered an employee unless all three of the following conditions are satisfied:
–The worker is free from control and direction of hiring entity in connection with performance of the work;
–The worker performs work that is outside the usual course of the hiring entity’s business; and
–The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.