ADMS 3420 WEEK 2:
EMPLOYEE vs. INDEPENDENT CONTRACTOR
Ahmed is a taxi driver. He works for only one company. He has signed a contract with them
saying he is an Independent Contractor. He files his tax return stating he is an independent
contractor. He owns his own taxi and can choose to work when he likes. He has the company
name on the taxi and wears a uniform. He gets his fares through the company dispatcher.
One night, Ahmed has his throat cut by a passenger. Amazingly, he survives but is not able to
work for a number of months. The company sends him a nice fruit basket but says that since he
cannot work they will be terminating his contract. With reference to the course material and
referencing any relevant cases please answer the following:
a) Is Ahmed an Employee or an Independent Contractor?
b) How would you determine this?
Even though the terms in the contract acknowledge Ahmed as independent contractor, according
to Belton v. Liberty case, the court can not solely rely on the terms and has to put more weight
on the substance of the contract.
5 factors test:
1. Control test The uniform, the fares, the logo… prove he’s an employee. But the fact that he
can choose when to work and stuff, prove he’s an independent contractor.
2. Tools test He drives his own car, he relies on the dispatcher on fares. Can be employee, can
be independent contractor in this test.
3. Organization test He plays important role in contributing profit to the company, to a certain
extent he’s an employee.
4. Durability and exclusivity test