HomeContractorQuote.com - Does anyone know the difference between an independent contractor and someone who is self-employed?

Does anyone know the difference between an independent contractor and someone who is self-employed?

I need to know whether I need to get worker's compensation insurance for a live-in caregiver. I don't know whether she is "self-employed" or an "independent contractor," nor do I know the difference between them. Any help out there? Thanks!

Public Comments

They're the same thing. Do you give her a W-2 or a 1099? If the former, she's an employee; if the latter, an independent contractor.
A live in care taker whether self employed or an independent contractor is not entitled to worker compensation. They are independent and must make provisions for their own protection. They should be issued a 1099 at the end of the year so they can do their taxes and so you can deduct their wages from your income. They can however sue you for injuries while working at your residence, so be careful and check their references.
She's not self employed if she works full time for you, and you tell her what time to show up, and what to do. The only "independent contractor" type home caregiver, is when you hire the SERVICE, and the SERVICE sends out whomever to your house - then THEY are the independent contractor, and the caregivers are THEIR employees. Here's a detailed listing of the difference between the employee and the independent contractor: http://www.twc.state.tx.us/news/efte/appx_e_twc_ic_test.html Something to keep in mind, also . . . if your independent contractor doesn't have workers compensation for themself or their employees, YOU are responsible for paying the benefits yourself, or covering them under YOUR workers comp. Workers comp rules vary by state - some states exempt domestic workers, but most state, even if you don't have to carry workers comp, you're still responsible for medical payments and lost wages. The WORST test, is the "w-2 vs 1099" test. It does NOT hold up in court. Many, many people try to get out of paying taxes for employees by paying them via 1099, and it does NOT work. Or rather, it will work for a while, then you get in lots of trouble.