Form De 38 - Worksheet On Employment Status

SOME EXAMPLES OF INDEPENDENT CONTRACTORS AND

COMMON LAW EMPLOYEES

Independent Contractors

Employees

An attorney or accountant who has his or

An attorney or accountant who is employed

her own office, advertises in the yellow

by a firm to handle their legal affairs or

pages of the phone book under "Attorneys"

financial records, works in an office at the

or "Accountants," bills clients by the hour, is

firm's place of business, attends meetings

engaged by the job or paid an annual

as needed, and the firm bills the clients and

retainer, and can hire a substitute to do the

pays the attorney or accountant on a

work is an example of an independent

regular basis is an example of an

contractor.

employee.

An auto mechanic who has a station

license, a resale license, buys the parts

An auto mechanic working in someone's

necessary for the repairs, sets his or her

shop who is paid a percentage of the work

own prices, collects from the customer,

billed to the customer, where the owner of

sets his or her own hours and days of

the shop sets the prices, hours, and days

work, and owns or rents the shop from a

the shop is open, schedules the work, and

third party is an example of an

collects from the customers is an example

independent contractor.

of an employee.

Dance instructors who select their own

Dance instructors working in a health club

dance routines to teach, locate and rent

where the club sets hours of work, the

their own facilities, provide their own sound

routines to be taught and pays the

systems, music and clothing, collect fees

instructors from fees collected from the

from customers, and are free to hire

customers are examples of employees.

assistants are examples of independent

contractors.

A repairperson who owns or rents a shop,

A repairperson working in a shop where

advertises the services to the public,

the owner sets the prices, the hours and

furnishes all of the tools, equipment, and

days the shop is open, and the

supplies necessary to make repairs, sets

repairperson is paid a percentage of the

the price for services, and collects from the

work done is an example of an employee.

customers is an example of an independent

contractor.

NOTE: Payroll tax audits conducted by EDD have disclosed misclassified workers in virtually

every type and size of business. However, certain industries seem more prone to

have a higher number of misclassified workers than others. Historically, industries at

higher risk of having misclassified workers include businesses that use:

• Construction workers

• Seasonal workers

• Short-term or "casual" workers

• Outside salespersons

DE 38 Rev. 2 (4-09) (INTERNET)

Page 7 of 7

Form De 38 - Worksheet On Employment Status - 2009 Page 7

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