Quick Facts Statutory Employer
QF1: Reporting wages on a 1099 form is not, by statutory employer under the Workers’
itself, an indication of independent contractor sta- Compensation Law is not what is com- Lewiston
tus. Other factors can be involved that will result monly thought of as the employer. Rather, Field Offices 1118 “F” Street
Lewiston, ID 83501
in a conclusion of an employer/employee relation- it is someone a worker can turn to for compensa-
tion if the actual employer did not have insurance Phone: 208-799-5035
ship, even if the wages are reported on a 1099.
when the worker was injured. Under §72-216, Boise Fax: 208-799-3482
QF2: There is no certiﬁcate of exemption in Idaho
for independent contractors. Idaho Code, a general contractor becomes a statu- 4355 W. Emerald St., Suite 105
QF3: A general contractor can require a subcon- tory employer of an injured worker of a subcon- Boise, ID 83706 Nampa
tractor to carry a workers’ compensation insurance
policy even if the subcontractor is not required
by law to have a policy. This is a contractual issue
tractor working under him if the subcontractor
does not have the required workers’ compensation
insurance in eﬀect. One of the primary reasons gen-
847 Parkcentre Way, Suite 7
Nampa, ID 83651
between the general contractor and the subcon-
tractor and is not regulated by the Idaho Industrial
eral contractors require certiﬁcates of insurance from
all of their subcontractors, including those who are
127 W. 5th N., Suite A
QF4: It is highly unlikely that multiple workers on
a job site performing the same function (rooﬁng,
not required by law to have insurance, is to protect
themselves from becoming a statutory employer.
Burley, ID 83318
501 N. 16th, Suite 107
Payette, ID 83661
dry walling, etc) are each independent contractors. This brochure is intended to answer the most Phone: 208-642-0181
See QF6. frequently asked questions regarding Idaho’s clas- Coeur d’Alene Fax: 208-642-6163
QF5: In Idaho, an injured worker of an uninsured siﬁcation of independent contractors and employ- 1111 W. Ironwood Drive, Suite A
subcontractor may collect workers’ compensation ees, and may not cover your particular situation. Coeur d’Alene, ID 83814 Pocatello
insurance beneﬁts from the general contractor. Contact an Employer Compliance representative Phone: 208-769-1452 1070 Hiline, Suite 300
QF6: Improperly classifying employees as sub- for assistance. Fax: 208-769-1465 Pocatello, ID 83201
contractors as a device to avoid paying workers’ Phone: 208-236-6399
compensation premiums is on the rise in Idaho. Idaho Industrial Commission Idaho Falls Fax: 208-236-6040
This is illegal and can result in unexpectedly large Main Oﬃce 1820 E. 17th, Suite 300
premium payments due at an audit, policy cancel- 700 S. Clearwater Lane Idaho Falls, ID 83404 Sandpoint
lation, civil or criminal charges, ﬁnes, and jail Boise, Idaho 83712 Phone: 208-525-7248 2101 West Pine St.
time. If you have knowledge of and would like to 1-208-334-6000 Fax: 208-525-7013 Sandpoint, ID 83864
report this fraudulent activity, contact the Indus- FAX 1-208-334-2321 Phone: 208-263-5747
trial Commission at 208-334-6000. www.iic.idaho.gov Kellogg Fax: 208-265-9637
QF7: In Idaho, there is no public “safety net” for 35 Wildcat Way, Suite B Be Sure You Know the Difference
injured employees of uninsured employers. The Requests for this publication in alternate formats Kellogg, ID 83837 Twin Falls Definitions
injured worker’s recourse is against the uninsured will be promptly handled. Phone: 208-786-4600 1411 Falls Avenue East, Suite 915 Right to Control Test
employer personally. Many employers recognize Fax: 208-786-7110 Twin Falls, ID 83301
that, in addition to complying with the law, main- Information on costs associated with this publication Phone: 208-736-4700
taining a workers’ compensation insurance policy are available from the Idaho Industrial Commission Fax: 208-736-3053
is a smart business decision. in accordance with Idaho Code § 60-202.
AA/EEO Employer 10-08/EC-AGFE/3,000
IDAHO INDUSTRIAL COMMISSION
The Right to Control Test whom services are rendered.
Full time required—If the worker devotes
the worker’s services (beyond the proﬁt or loss
ordinarily realized by the employees) is gener-
Introduction substantially full time to the business of the ally considered an independent contractor.
n Idaho, a worker’s status as an employee or an
independent contractor is determined based person for whom services are rendered, such
Whether someone who works for you is an employee or an independent on the four main criteria commonly referred to person has control over the amount of time the 3. FURNISHING OF MAJOR ITEMS OF EQUIPMENT
contractor is an important distinction. Generally, a person cannot be- as “the right to control test.” Considered collec- worker can work and impliedly restricts the • Doing work on the employer’s premises—If
come an independent contractor just because he or she wants to be, or tively, the four right to control factors distinguish worker from doing other gainful work. the work is done on the premises of the person
because an employer wants the person to be an independent contractor. an employee from an independent contractor. The Order or sequence determined by princi- for whom the services are performed, this
It is not enough that the employee and employer agree. determination of status is open-ended because it pal—If the worker performs services in the or- shows control over the worker, especially if the
Though it may be tempting to save money by classifying workers as requires a factual judgment over whether a case der or sequence determined by the person for work could be done somewhere else.
independent contractors, misclassification can have serious financial and meets the overall test. This approach neither pri- whom the services are performed, the worker is • Furnishing tools and equipment—If the
legal consequences. oritizes criteria nor speciﬁes a minimum number likely an employee. person for whom services are performed
that must be met. The Idaho Supreme Court has Oral or written reports—A requirement furnishes signiﬁcant tools, materials, or other
This publication was designed to assist in properly classifying workers in repeatedly recognized that those cases where there that the worker submit regular oral or written equipment, this indicates a direct employment
the State of Idaho for workers’ compensation insurance purposes only. is doubt about whether a worker is an independent reports to the principal indicates control. relationship.
Please contact one of the Industrial Commission offices on the back of contractor or employee are to be resolved in favor Payment of business and/or traveling ex- • Signiﬁcant investment—If the worker invests
this brochure if you have specific questions. of ﬁnding the worker to be an employee. penses—If the principal ordinarily pays the in facilities used in performing services and
worker’s business or traveling expenses, then that are not typically maintained by employ-
the worker is usually considered an employee. ees, this indicates an independent contractor
Definitions 1. DIRECT EVIDENCE OF THE RIGHT TO CONTROL Working for more than one ﬁrm at a time— relationship.
Compliance with instructions—Control is
If a worker performs service for several unre- • Realization of proﬁt or loss—This factor
Determining the difference between employees and independent present if the person for whom the services are
lated persons or ﬁrms at a time, this indicates overlaps the method of payment but addresses
contractors requires a detailed analysis. According to Title 72, Idaho performed has the right to require compliance
an independent contractor relationship. whether sale of the business assets would pro-
Code, “employee” is defined as any person who has entered into the with instructions.
Making service available to the general vide the worker with a gain or recovery. If so,
employment of, or who works under contract of service or apprentice- Training—Training through meetings, attend-
public—If a worker makes services available to he may be an independent contractor.
ship with, an employer, as opposed to an “independent contractor” ing classes, or apprenticeship with a more ex-
the general public on a regular and consistent
which is defined as any person who renders service for a specified perienced worker indicates the right to control.
basis, this indicates an independent contractor 4. RIGHT TO TERMINATE RELATIONSHIP WITHOUT LIABILITY
recompense for a specified result, under the right to control or actual Integration—Integration of the worker’s
relationship. • Continuing relationship—A continuing rela-
control of his principal as to the result of his work only and not as to services into the principal’s business operations
Competitive selection among subcontrac- tionship between the worker and the principal
the means by which such result is accomplished. shows that the worker is subject to direction
tors—If the principal uses some competitive indicates a direct employment relationship,
means for reducing his own cost in selecting even if the work is performed at recurring ir-
Simply put, an independent contractor is a person who provides Services rendered personally—If the services
a subcontractor, then the principal may be a regular intervals.
goods or services to another entity under terms specified in a contract. must be rendered personally, then the right to
prime contractor instead of an employer. • Right of employer to discharge—The
Generally speaking, independent contractors retain control over control is suggested.
their schedules and number of hours worked, jobs accepted, job Hiring, ﬁring, supervising and paying as- principal’s right to discharge the worker
performance, and how the job is ultimately completed. This contrasts sistants—If the person for whom services are 2. METHOD OF PAYMENT without liability indicates a direct employment
rendered hires, discharges, and pays workers, Payment on a regular, periodic basis—Pay- relationship.
with regular employees, who usually work at the schedule required
then that factor shows control over all workers. ment by the hour, week, day, month or other • Employee’s right to terminate—If the worker
by the employer and whose performance is directly supervised by
If a worker engages his own assistants, he may regular periodic interval generally points to an has the right to stop working at any time with-
the employer. However, these definitions alone do not adequately
be an independent contractor. employer-employee relationship. out contractual liability, this is indicative of an
determine a worker’s status.
Set hours of work—Control is indicated if set Realization of proﬁt or loss—A worker who employment relationship.
hours of work are established by the person for can realize proﬁt or suﬀer a loss as a result of