The differences between independent contractors and employees may seem obvious on paper, but in practice it is not so easy to distinguish between these two types of workers. Employers should take care to follow the Employment Act for all workers who qualify as employees under the law.
The Employment Act defines an employee as “any person who has entered into or works under … a contract of employment, whether the contract is for manual labour, clerical work or otherwise and whether it is a contract of service or apprenticeship”. Employment Act, Section 2. The term employee also refers to people who work as commission agents, who perform short term contract work, who work part-time, or who are dependent on the employer to carry out their work. Contracts of employment may be express or implied and oral or in writing.
Independent contractors are not considered employees protected by the Employment Act. They usually are “self-employed” or run their own business. Unlike employees, independent contractors do not depend on employers to carry out their work. Employers do not tell them what to do, how to do it, or when to do it, beyond a general assignment at the beginning of the job. Independent contractors can set their own hours, charge any fee they choose for their services, and perform the work in the manner they see fit.
If an employer has a significant amount of control over a person performing work for him or her, if the employer gives a large amount of input into the person's work, or if the person is dependent on the employer to get the job done, that person may be an employee. Employers who misclassify workers as independent contractors avoid paying benefits, and those workers do not receive the protections of the Employment Act.
Employers who consider their workers to be independent contractors should consult an attorney about Bahamian employment laws. Failing to properly classify workers may lead to legal liability under the Employment Act if an employee is not given its protections.
To find out more about Bahamian employment law, visit Gonsalves-Sabola Chambers online or call the office at +1 242 326 6400.