What Qualifies a Worker as an Independent Contractor in Arizona?


Whether you’re the employee or an employer, it pays to understand the laws surrounding work in the state of Arizona. While some people have more traditional jobs where they work full time for a single employer, others perform tasks on a less regular or formal schedule and may work for one or a handful of companies.

Independent contractors refer to employees hired to perform a particular job without direct supervision from their employers. In general, the employer can only control the result of a contractor’s work, not when or how it’s completed. While some workers enjoy independent contracting because of the flexibility and variety it offers, others would prefer to be employed full time in house.

Some employers deliberately make employees independent contractors to get out of providing the salary and benefits available to permanent workers. Keep reading to learn who qualifies as an independent contractor in Arizona and discover the benefits and drawbacks associated with this role.

Rules and Requirements for Independent Contractors

The state of Arizona dictates specific rules for how independent contractors are viewed and treated by their employers. Because independent contractors are not full-time workers with traditional salaries and benefits, employers are prohibited from controlling the place and time wherein contractors do their jobs.

The only requirement the employer can make is that the contractor perform a service on time and to the desired specifications. Below are some of the other stipulations employers must adhere to when using independent contractors in Arizona:

  • Contractors cannot be exclusive to employers
  • Contractors don’t need to possess licenses or registrations
  • Contractors receive a project fee rather than an hourly wage
  • Businesses can’t dictate when contractors may work
  • Businesses can’t require contractors to work on location
  • Businesses can’t require contractors to undergo training

Independent contractors and employees also have different rules with regard to paying taxes. For individuals classified as employees, companies are required to withhold, deposit, report, and pay employment taxes, Social Security, and Medicare. On the other hand, contractors typically have to pay their own income taxes. Independent contractors generally don’t qualify for benefits or unemployment insurance.

The Consequences of Misclassifying Employees

As a business owner, it’s important to understand that misclassifying an employee can come with serious consequences. Along with having to pay back taxes to the IRS, companies that misclassify their workers may be on the hook for state unemployment taxes, workers’ compensation premiums, overtime wages, vacation and sick time, and even medical expenses due to employees not receiving benefits they were owed. If you’re unsure about how to classify an employee, you may want to talk to an employment attorney in your state for assistance.

Benefits and Drawbacks for Independent Contractors

Serving as an independent contractor comes with both positives and negatives. One of the many advantages of being a contractor is that you have flexibility with regard to when and where you work. Additionally, contractors have the option to work for multiple employers and leave a job if it’s not working out.

On the other hand, independent contractors don’t enjoy all the same benefits as permanent employees. Not only are independent contractors unable to utilize workers’ compensation, but they are also barred from receiving sick days, overtime, or unemployment benefits. Finally, independent contractors don’t typically receive health coverage through their companies. If your employer classified you as an independent contractor but you believe you’re entitled to employee status, don’t hesitate to contact the team at JacksonWhite Law for assistance.

Our Employment Law Attorneys Are in Your Corner

Based in Mesa, JacksonWhite Law offers a wide array of services to employees and employers in the East Valley and beyond. We understand that employment issues can be complex and have the potential to impact many facets of your life. Our experienced employment law team is on hand to assist with a wide array of issues from workers’ compensation to supporting independent contractors.

Call our Employment Law team at (480) 464-1111 to discuss your case today.

Contact Our Employment Law Team

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