Is Your Subcontractor Really an Employee?

Question 3: Do they have an established business of their own?

Take the "Six-Part Test" below

A “yes” answer to all six questions usually means the worker has a business of his/her own, and you are not responsible for workers’ comp premiums, unemployment tax or wage and hour requirements.

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Supervision
Do they perform the work free of your direction and control? (See Question 2.)

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Business office
Do they maintain and pay for a place of business that is separate from yours?
— A cell phone and a truck is not enough. You need to visit his or her place of business and make sure.

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Previously established business
Do they have an established, independent business that existed before you hired them? Evidence may include other customers or advertising.

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IRS taxes
When you entered into the contract, was the contractor responsible for filing a business tax return with the IRS for his or her business?

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Maintains books
Do they maintain a set of books dedicated to the expenses and earnings of the business?  You can ask to review them for your protection.

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Required registrations

Note: If you plan to treat your worker/subcontractor as an independent, make sure you can prove it. You may always ask the person you are hiring to see the above documents.

Did you answer “yes” to ALL SIX questions on this page?

Then they are a contractor, and usually you will have:

  • No workers’ compensation premiums due.
  • No wage and hour requirements.
  • No unemployment tax.

Did you answer “no” to ANY of the six questions on this page?

You usually DO have to do the following for the worker(s) you are hiring, since they are NOT independent contractors.

Click on the links above to take care of it right now!


Go back to the previous question.

For more information:
Contractor Six-Part Test (above) is from RCW 51.08.195.

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