Exploring the Economic Reality Test: Control Over Work

When distinguishing between an independent contractor and an employee, the first factor in the economic reality test, Control Over Work, serves as a critical consideration. This factor examines the extent to which a worker is subject to control by the employer in terms of how, when, and where tasks are performed. Let’s dive deeper into what this means and how it impacts worker classification.

What Does “Control Over Work” Mean?

Control over work refers to the employer’s authority to dictate the specifics of how a job is done. According to the U.S. Department of Labor (DOL), this factor evaluates:

1. Work Processes:
   • Employee: The employer provides detailed instructions on how tasks should be executed. This may include step-by-step processes, required tools, and specific methods.
   • Independent Contractor: The worker decides the best approach to accomplish the job, leveraging their expertise and judgment.
2. Work Schedule:
   • Employee: The employer sets fixed hours, assigns shifts, and may require attendance at specific locations.
   • Independent Contractor: The worker usually determines their schedule and can work at their own pace, as long as deadlines or project milestones are met.
3. Location of Work:
   • Employee: Tasks are often performed at the employer’s premises or a location designated by the employer.
   • Independent Contractor: The worker generally has the flexibility to choose their work location, unless specific site-based work is required.
4. Training and Supervision:
   • Employee: The employer provides training to ensure compliance with company policies or standard procedures.
   • Independent Contractor: The worker is expected to have the skills necessary to complete the task without significant training or oversight.

Practical Examples of Control Over Work

1. A Delivery Driver:
   • If the company dictates the driver’s route, start times, and delivery methods, they likely should be classified as an employee.
   • If the driver can set their schedule and choose their delivery methods, they may be considered an independent contractor.
2. A Graphic Designer:
   • An employee graphic designer might be required to use company software, follow brand guidelines, and attend regular team meetings.
   • An independent contractor graphic designer could use their preferred tools, design methods, and work remotely without oversight.

Why Does Control Over Work Matter?

This factor is pivotal because it highlights the degree of independence a worker has in performing their tasks. The more control an employer exerts over the worker’s daily activities, the more likely the worker is an employee under the DOL’s guidelines. Independent contractors, on the other hand, operate their own businesses and maintain autonomy in their methods and processes.

Understanding and properly applying the “Control Over Work” factor is essential to maintaining compliance with labor laws. By recognizing the boundaries of employer control, businesses can foster clear and fair relationships with their workforce while avoiding the pitfalls of misclassification.

Go here to start at the beginning of this blog series on understanding the difference between an employee and independent contractor.

For more details on worker classification and the economic reality test, visit the official DOL guidelines here.