As more Americans take on work within the gig economy to make ends meet, exploring the legal issues that those with side hustles face is vitally important. Determining employment status and other employee benefits is necessary to ensure that those employed within the gig economy have access to workers’ rights. Regardless of whether a company hires you as an independent contractor or employee, where you live may determine what workers’ protections you have access to. California and Massachusetts have begun to tackle the divisions between independent contractors and employees. Other states are paying attention to developments and monitoring whether legislation may be required in their states.

Gig Worker or Employee?

One of the most difficult decisions you can make when taking on a job is determining whether the company that hired you is hiring you as an employee or an independent contractor. The IRS suggests three factors to understand when deciding whether a person is an independent contractor or an employee.

1. Type of relationship – is there a written contract or employee-type benefits?
2. Financial – are aspects of the worker’s role controlled by the payer, such as how the worker is paid, who provides tools and supplies required, and whether expenses are reimbursed.
3. Behavioral – does the company control what the worker does and how their role is performed?

When factoring in these three questions, it’s important to determine whether a hire is an independent contractor or an...

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