['Contingent Workforce']
['Independent Contractors']
06/14/2024
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Maine has established a common definition for employment so that it is the same for wage and hour law as well as unemployment coverage and workers’ compensation. The objective of a common definition is to replace the multiple tests previously used by state agencies and eliminate confusion as to whether a worker is an employee or independent contractor for purposes of employment law.
Maine state law presumes a worker is an employee unless the business or person who does the hiring can demonstrate otherwise. The following criteria must be met:
- The individual has the essential right to control the means and progress of the work except as to final results;
- The individual is customarily engaged in an independently established trade, occupation, profession or business;
- The individual has the opportunity for profit and loss as a result of the services being performed for the other individual or entity;
- The individual hires and pays the individual’s assistants, if any, and, to the extent such assistants are employees, supervises the details of the assistants’ work;
- The individual makes the individual’s services available to some client or customer community even if the individual’s right to do so is voluntarily not exercised or is temporarily restricted; and
- At least three (3) of the following criteria must be met:
- The individual has a substantive investment in the facilities, tools, instruments, materials, and knowledge used by the individual to complete the work;
- The individual is not required to work exclusively for the other individual or entity;
- The individual is responsible for satisfactory completion of the work and may be held contractually responsible for failure to complete the work;
- The parties have a contract that defines the relationship and gives contractual rights in the event the contract is terminated by the other individual or entity prior to completion of the work;
- Payment to the individual is based on factors directly related to the work performed and not solely on the amount of time expended by the individual;
- The work is outside the usual course of the business for which the service is performed; or
- The individual has been determined to be an independent contractor by the federal Internal Revenue Service.
Maine law provides penalties to deter the intentional misclassification of workers as independent contractors.
Related information
Citations
- 26 M.R.S.A. Chapter 7
- Part 795 — Employee or independent contractor classification under the Fair Labor Standards Act
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Copyright 2024 J. J. Keller & Associate, Inc. For re-use options please contact copyright@jjkeller.com or call 800-558-5011.