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Nilesh (Advocate & Student CS)     04 February 2010

Independent Contractor

Pls specify the Legal Definition of Independent Contractor and hi liability on causuality at site



 2 Replies

AEJAZ AHMED (Legal Consultant/Lawyer)     04 February 2010


A person or business who performs services for another person under an express or implied agreement and who is not subject to the other's control, or right to control, the manner and means of performing the services; not as an employee. One who engages an independent contractor is not liable to others for the acts or omissions of the independent contractor.
Employee vs. Independent Contractor
The distinctions between the two are most often relevant in the tax arena and most other areas of law adopt, in one form or the other, tax case law in their definitions.
There are a number of factors which to consider in making the decision whether people are employees or independent contractors. No one factor is controlling. And a designation of the relationship by the parties is also not controlling.
One of the most important considerations is the degree of control exercised by the company over the work of the workers. An employer has the right to control an employee. Thus, it is important to determine whether the company had the right to direct and control the workers not only as to the results desired, but also as to the details, manner and means by which the results were accomplished. You should ask yourself, for example, whether the company had the right to control the number and the frequency of breaks, how the workers performed their work, the type of equipment they could use, and their work schedule. If you find that the company had the right to supervise and control such details, and the manner and means by which the results were to be accomplished, such a finding would indicate an employer-employee relationship. On the other hand, the absence of those elements of supervision and control by the company would support a finding that the workers were independent contractors and not employees. In this regard it should be kept in mind that it is the right to control and not the actual exercise of control that is important.
Another factor to be considered is whether the workers were individually carrying on an independent business or whether they regularly worked in the course of the company's general business. For this purpose you may consider whether they advertised or generally offered their services to others; whether or not they as individuals, or as a group, used a business name in dealing with company for the purpose of contracting their services; whether they listed themselves in any business capacity in city or telephone directories; whether they maintained their own offices or place of work; whether they procured necessary licenses for the carrying on of their activities; whether they supplied their own tools or equipment; and any other evidence tending to show that they were carrying on an independent business as individuals or as a group.
Another factor to be considered is the term and duration of the relationship between the company and the workers. The relationship of an independent contractor generally contemplates the completion of an agreed service and result within a stipulated period of time. On the other hand, an employment relationship generally contemplates a continuous rendering of services for an indefinite time.
Also, an independent contractor is generally one who has the opportunity to make a profit, or the risk of taking an out-of-pocket loss, while an employee generally does not have that opportunity nor does he take that risk. Thus, an employee is generally paid on a time or piece-work or commission basis, whereas an independent contractor is ordinarily paid an agreed amount, or according to an agreed formula, for a given job.

See also for references:







Nirali Nayak   30 June 2021

Hello sir, greetings of the day.
As per your query, an independent contractor is a person who is hired by a company to do a particular job. The company does not have any control over how the job has to be accomplished. Putting it simply, when a person takes up a contractual work for another person according to his/her own methods is known as independent contractor.  He is a self-employed person or entity contracted to perform work for or to provide services to another entity as a nonemployee. Additionally, an entity that uses the services of an independent contractor is not required to provide them with employment benefits, such as health insurance and employer-sponsored retirement accounts, that the entity might otherwise provide were the contractor an employee. The payer must correctly classify from the beginning each payee as either an independent contractor or employee. 
Generally when any incident happen at site, the contractor is liable. And in case vicarious liability the master is not held liable for the faults of the independent contractor. And for the casualties at the site, the independent contractor cannot be held liable. As he works as a freelancer.
Hope this has solved your query.
Nirali Nayak
Law Student

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