Wrong example, AlterEgo. To make it similar, let's say that I have 100 roofs around town (all belong to me) and I keep sending the same contractor to repair it, month after month, year after year, specifically saying that he has to do it exclusively for me, i.e., that he can not engage in roof repair for anyone else. That example stands a higher chance (but not necessarily) to be classified as "employee." Please note that the use of "higher chance" and "not necessarily," as I already explained that IRS determination depends on a multitude of factors.
just to clarify:
Employee vs Independent Contractor
Degree of control over how work is performed Performs work, under the direction and control of their employer, on an ongoing basis.
Independent Contractor Has a high level of control in how the work is done.
Hours of work Generally works standard or set hours (note: a casual employee's hours may vary from week to week).
Independent Contractor Under agreement, decides what hours to work to complete the specific task.
Expectation of work Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period).
Independent Contractor Usually engaged for a specific task.
Risk Bears no financial risk (this is the responsibility of their employer).
Independent Contractor Bears the risk for making a profit or loss on each task.
Independent Contractor Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy.
Superannuation Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer.
Independent Contractor Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions).
Tools and equipment Tools and equipment are generally provided by the employer, or a tool allowance is provided.
Independent Contractor Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services).
Tax Has income tax deducted by their employer.
Independent Contractor Pays their own tax / GST / VAT
Method of payment Paid regularly (for example, weekly/fortnightly/monthly).
Independent Contractor submits an invoice for work completed or is paid at the end of the contract or project.
Leave Entitled to receive paid leave (for example, annual leave, personal/carers' leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees.
Independent Contractor Does not receive paid leave.
