For those who own a successful landscaping business, we are sure you do not do everything yourself. You may have oversight on every project, and make important decisions for your landscaping business, but day-to-day there will be others who have roles such as landscape design, construction, and administration, to name but three.

This brings us to something that can cause confusion for landscaping companies and those who work for them. We are talking about whether someone working for a landscaping company is legally considered an employee or a contractor. These are important distinctions as they influence the legal status of those who work for you and your obligations towards them.

To try and clarify some of the confusion surrounding the employee vs contractor question, we have outlined some of the basic facts including what the main differences are as they relate to employees or contractors working for your landscaping business.

The Distinction Between An Employee And A Contractor

Before taking on a landscaping project, one simple test that any landscaping company, including Lonepine Landscapes, can use to distinguish between who is an employee is this: An employee has a contract of service, and a contractor has a contract for services. Now you might be saying those are almost identical, but they are not.

When an employee enters a contract of service it means they are part of the business and in almost all circumstances work only for that business in the capacity they have been employed. The key here is that they have an employment contract that will be in writing and confirms their employee status.

Conversely, a contractor’s contract will be for service which means they are providing a service to the business that has contracted them. Note that a contractor is not always an individual and can be another business or organisation. That is not the case with employees who are always individuals.

Multi-Factor Tests To Differentiate Employees From Contractors

Exclusivity: An employee will normally only work exclusively for one landscaping business, whereas a contractor has the right to work for and provide their services to several landscapers.

Measure Of Control: If someone is an employee, it is their employer who has the right to stipulate where they work, when they work, and how they work. Whilst a contractor might agree to provide certain services, when they carry them out they work under their own initiative, and have a degree of flexibility as to how they work within the confines of the contract they have agreed.

Delegation: When an employee is given their duties they would not normally have the right to delegate them to another employee unless this was in agreement with their employer. A contractor can choose to delegate some or all of the tasks they have been set to someone else or another contractor company provided the contract they have with their client does not prohibit this.

Quality Of Work And Subsequent Risks: If an employee does a poor job, then the onus is on their employer to take corrective action and put it right. As such their employer takes on the risk related to warranties. For contractors, it is they who must put right anything which goes wrong and are obligated to do so in their time and at their expense, including indemnifying their clients if they incur additional costs as a result of the poor work.

Tools/Equipment: An employee will either be supplied with the tools and equipment they require to fulfil their role or be reimbursed for any expenses they incur acquiring them. A contractor has no such arrangement and must endure any expenses they incur purchasing tools and equipment.

Hours Worked: In most cases, an employee will be given their set hours of work by their employer. Contractors, provided they fulfil their obligations to complete a project, can set whatever working hours they wish.

Leave Entitlement: This is simple whereby an employee is entitled to leave, including sick leave, but a contractor is not.

Payment: An employee is paid a salary by their employer and has tax taken at source. Contractors will receive fees from their clients and are responsible for all their tax affairs.