• Realization of profit or loss. The worker’s ability to realize a profit or suffer a loss is indicative of independent contractor status. In other words, if the worker is subject to real risk of economic loss due to significant investments or bona fide liabilities for expenses, this factor indicates that the worker is an independent contractor. • Availability of services. An independent contractor is generally free to seek out business opportunities. If a worker’s services are available to the general public on a regular and consistent basis, this factor weighs in favor of independent contractor status. It is possible, however, that an individual who performs services for more than one person or company may be an employee of each of those persons or companies. Type of Relationship • Benefits. The provision of benefits such as insurance, a pension plan, paid time off vacation pay, and sick pay indicate an employer- employee relationship. • Agreements. Written contracts describing the relationship the parties intend to create will assist in defining the relationship as an employer-employee relationship or an independent contractor arrangement. • Permanency of relationship. If a worker is engaged with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is generally considered evidence of an employer-employee relationship. • Key aspect of business. If a worker provides services that are a key aspect of regular business activity, it is more likely the company will have the right to direct and control the worker’s activities. Provision of key aspects of business services suggests an employer-employee relationship. The U.S. Department of Labor and the Minnesota Department of Labor use a different set of factors to address employee or independent contractor status for operation of minimum wage payments and the applicability of the Federal Fair Labor Standards Act. Those factors focus on the “economic realities” between the parties. 22
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