Utilization of contract workers can be a beneficial and efficient tool for employers. It can also facilitate relationships between geographically distant parties—a business in Hugo can contract with someone in Duluth without the burden of being physically in the same building. But, often the employer is unsure of what actually constitutes an employee relationship versus an independent contractor relationship. The difference is very important.
An employment relationship is determined by a number of factors. Nichols v. Metro Bank, 435 N.W.2d 637, 639 (Minn. Ct. App. 1989). The most important factor “is the right of the employer to control the means and manner of performance.” Id. An independent contractor contracts to do a piece of work according to the contractor's own methods and is subject to another's control only as to the end product or final result of the work. Hammes v. Suk, 291 Minn. 233, 235, 190 N.W.2d 478, 481 (1971). That is, the assignment is given, the end result identified, and in between it is up to the contractor to use her own tools, ingenuity, and resources to create a final product.
The distinction between employee and employer is critical. Employers are responsible for the actions of their employees but are NOT responsible for the actions of an independent contractor. Avoiding liability for an independent contractor's errors or actions can keep an employer out of an unwanted litigation.
While there are other factors that speak to whether a relationship is that of employee-employers or employer-independent contractor, making sure you meet the primary factor is a good start.
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