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For more information, contact City of South Bend Business License Administrator, Michelle Adams | madams@southbendin.gov | 574.235.5912 | 7 <br />RESOURCE GUIDE <br />INDEPENDENT CONTRACTORS <br />WHAT IS AN INDEPENDENT CONTRACTOR? <br />An independent contractor is a person, business, or corporation that provides goods or services to <br />another entity under terms specified in a contract or within a verbal agreement. Unlike employees, an <br />independent contractor does not work regularly for an employer but works as and when required. <br />INDEPENDENT CONTRACTOR VS. EMPLOYEE <br />To determine whether a worker is an independent contractor or employee under common law, you <br />must examine the relationship between the worker and the business. All evidence of control and <br />independence in this relationship should be considered. The facts that provide this evidence fall into <br />three categories: behavioral control, financial control, and the relationship of the parties. <br />BEHAVIORAL CONTROL <br />Behavioral Control covers facts that show whether the business has a right to direct or control how <br />the work is done through instructions, training, or other means. <br />FINANCIAL CONTROL <br />Financial Control cover facts that show whether the business has a right to direct or control the <br />financial and business aspects of the worker’s job. <br />THIS INCLUDES: <br />●The extent to which the worker has unreimbursed business expenses <br />●The extent of the worker’s investment in the facilities used in performing services <br />●The extent to which the worker makes his or her services available to the relevant market <br />●How the business pays the worker <br />●The extent to which the worker can realize a profit or incur a loss