Hawaii Jury Instruction - 10.10.3 Employee vs. Self-Employed Independent Contractor
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FAQ
Becoming an independent contractor is one of the many ways to be classified as self-employed. By definition, an independent contractor provides work or services on a contractual basis, whereas, self-employment is simply the act of earning money without operating within an employee-employer relationship.
It is important for an employer to be aware of the distinction between employee and contractor as this will affect whether an individual benefits from various employment protections. Failure to correctly classify an individual could therefore result in claims against the employer by an individual.
Generally speaking, the difference between independent contractors and employees in California is whether or not the entity paying for services has the right to control or direct the manner and means of work (tending to signify an employment relationship.)
The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.
An independent contractor has no expectation of benefits that would normally accrue from an employer-employee relationship and is responsible for obtaining a current general excise tax license and for paying all applicable taxes."