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Independent Contractor or Employee?

What does it mean to be an independent contractor? How is that different than employment?

When you agree to be an independent contractor, you agree that you are providing services as a business instead of as an employee. You file taxes as a sole proprietor or small business owner.

Why do companies use independent contractors instead of hiring employees? Part of it is financial: it costs less, they don't have to pay employment taxes and insurance, and there are fewer restrictions and requirements.

The trade-off for contractors is more freedom but fewer protections. Minimum wage and FLSA laws don't apply.

Are companies like Doordash, Uber/Uber Eats, Grubhub, Instacart, and Lyft misclassifying employees? Are they exploiting contractors? That's a hot topic, with a lot of debate and a lot of people on both sides of the issue. Many like myself are somewhere in the middle: I believe that gig economy platforms abuse the use of independent contractors. However, I don't want to be an employee.

The following articles dive into the differences between being an independent contractor and being an employee. We also take a look at a lot of the legislative and court issues related to independent contractor status.

Independent Contractor or Employee?

Articles on California's AB5 Legislation

The State of California passed AB5 in September 2019. That legislation implemented an ABC test to determine employee classification. The strict requirements of the ABC test would potentially force delivery and rideshare companies to hire employees rather than independent contractors. The following articles were commentary on how AB5 would impact delivery contractors as the legislation was considered and ultimately passed.

Articles About California's Proposition 22

In response to AB5, gig economy companies campaigned together for a referendum allowing them to continue using independent contractors. It would also enact minimum pay thresholds for app-based workers. These articles discuss the impact of Proposition 22 for independent contractors in the gig economy.

Articles About the Department of Labor's New Independent Contractor Rules

The Department of Labor has proposed new rules that they would use to interpret whether a work relationship should be classified as employment verses independent contractor. These articles examine the proposed rule and what the implications would be for delivery and rideshare contractors.

Other Legislation and Court Decisions about Independent Contractor Classification

We look at a number of rulings and at legislation being considered around the country that would impact whether delivery and rideshare companies can use independent contractors or if they'll be forced into an employee model.

Ron Walter of Entrecourier.com

About the Author

Ron Walter made the move from business manager at a non-profit to full time gig economy delivery in 2018 to take advantage of the flexibility of self-employment. He applied his thirty years experience managing and owning small businesses to treat his independent contractor role as the business it is.

Realizing his experience could help other drivers, he founded EntreCourier.com to encourage delivery drivers to be the boss of their own gig economy business.

Ron has been quoted in several national outlets including Business Insider, the New York Times, CNN and Market Watch.

You can read more about Ron's story,, background, and why he believes making the switch from a career as a business manager to delivering as an independent contractor was the best decision he could have made.

red button labeled read Ron's story.