Employee or independent contractor? A Simple Guide for Florida Small Business Owners
As a small business owner in Florida, deciding whether to classify someone as an employee or an independent contractor is one of the most important choices you'll make. Getting it wrong can lead to big problems: back taxes, penalties, lawsuits, or denied unemployment claims. The good news? It's based on how the working relationship actually looks in practice—not just what a contract says.
Why Does This Matter?
Employees get protections like minimum wage, overtime pay (under federal law), unemployment benefits, and workers' compensation coverage. You also pay payroll taxes, unemployment taxes, and possibly provide benefits.
Independent contractors handle their own taxes, don't get overtime or unemployment benefits, and aren't covered by your workers' comp (usually). This can save you money, but only if the classification is correct.
Misclassifying someone on purpose is a serious issue in Florida.
The Key Test: Who Controls the Work?
Florida law (backed by court decisions) focuses mainly on control. Ask yourself:
Do you care only about the final result (e.g., a finished website or repaired roof)?
Or do you control how the work gets done—like setting hours, telling them exactly what steps to follow, or requiring them to work on your site?
If you control just the result, it's likely an independent contractor. If you control the details, means, schedule, or methods, it's probably an employee.
This "right of control" is the biggest factor courts look at.
Other Important Factors
No single thing decides it—look at the whole picture. Common factors include:
How they're paid: Hourly or salary usually points to employee. Pay per job or project leans toward contractor.
Who provides tools and equipment: If you supply everything (computer, truck, materials), more likely employee. If they use their own, more likely contractor.
How the worker was hired: Did you pick them directly and set all terms? Employee. Did they bid on a job or have their own business? Contractor.
Length of the relationship: Ongoing or indefinite? Employee. Short-term or project-based? Contractor.
Independence: Do they have their own business, advertise services, or work for others? Contractor. Are they fully integrated into your business? Employee.
Tips to Get It Right
Look at the real day-to-day relationship, not just labels or contracts.
Keep good records: written agreements, invoices, proof they have their own business.
Review classifications regularly—things can change over time.
If it's a close call, err on the side of employee or get professional advice.
Classifying workers correctly protects your business and treats people fairly. If you're unsure about a specific situation, talk to an expert. It's worth it to avoid headaches down the road!