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I work remotely for a small US startup as a contractor (the contract I have signed is a consultancy agreement), and I am based overseas. While reading other posts on this website, I have started doubting whether I should actually be legally considered a full-time employee, since:

  • The contract I have signed requires me to work only with this company
  • The company has set hours for which I must be "on the clock" which cover my entire working week
  • I am expected to participate in company's in-person meetings
  • I am required to communicate (and sometimes negotiate) when I want to take time off to my supervisor

I send a monthly invoice to the company. The amount I'm paid is the same every month, and there isn't any timesheet I need to send.

I wonder whether the company I work for is trying to cut some corners, labeling me as a contractor rather than a full-time employee, since I have read that as the latter a set of benefits should be given to me. At the same time, I suspect that being a non-US citizen and resident, my situation might be special.

Should I be legally considered a full-time employee, rather than an independent contractor?

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  • 1
    It isn't the benefits that are important, it is the taxation of your income that the US government is interested in.
    – David R
    Aug 22, 2023 at 14:11
  • @DavidR depending on the state/city they may be required to provide specific benefits: paid vacation, sick leave, paid family leave for all employees working more than x hours per week. Aug 22, 2023 at 16:06
  • I assume your contact includes payment for your exclusivity? If you are consultant, it means the terms of the agreement are what’s legally binding, if it’s not in the contract they cannot force you to do it. Do you calculate your own necessary taxes or are taxes taken out on your behalf?
    – Donald
    Sep 8, 2023 at 9:42

3 Answers 3

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  • The contract I have signed requires me to work only with this company;
  • I am required to communicate (and sometimes negotiate) when I want to take time off to my supervisor;

Those two points alone, make your work not that of an independent contractor.

Because you are not independent. You work for a single employer full time. In Germany, this would be called a "Scheinselbständigkeit" (fake independence).

Because you claim to be an independent contractor before the law, but you are in fact not.

This law does not actually exist to hassle people making a lot of money by providing sought after services to tech corporations. It is illegal, because it is an easy way for big corporations to circumvent labor laws and protections and exploit their workers.

Your case is not the target, the target are those "independent contractor" butchers, that get transported in from a neighboring country, live on the companies property, work in the companies slaughterhouse, and then get paid no health insurance and no minimum wage, because a contract with an independent contracter doesn't need any of those. Or the delivery driver delivering parcels for exactly one company for years, but on paper, they are an independent contractor, just hired to drive the company's truck and deliver their parcels. Again, obviously below minimum wage and mandatory health insurance, since independent contractors have to handle that themselves.

So yeah... you are not independent if you have a single client.

If the "overseas" you reside and work from is Germany, you will have a problem with that, although authorities might turn a blind eye because you will be making a lot more money than minimum wage that easily pays for your health insurance and a proper "salary" so are obviously not exploited as badly as those other examples when working for a US Tech corporation.

From the US side, they could care less. They get your work, they get an invoice, they pay, everybody is happy. Whether you fulfil your local obligations as an independent contractor is not their problem, they cannot possibly check or enforce it anyway.

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At the same time, I suspect that being a non-US citizen and resident, my situation might be special.

More of that's the norm than special.

I work remotely for a small US startup as a contractor (the contract I have signed is a consultancy agreement), and I am based overseas.

This means you should be worried about your country laws, not us laws. And you may have a valid concern, but not in the way you hope, as in some countries (for example UK) even if you are an overseas remote contractor, but cannot pass the "contractor test", you may be labelled as employee for tax purposes anyway. You won't qualify for any of the US employee benefits, but will have deal with taxation as an employee in that case. Fun.

If they are big enough this may also be "the company" problem but I don't know enough to opine on that.

I have started doubting whether I should actually be legally considered a full-time employee

You can write any of those things into contracting contract just fine. It's all down to what type of service you agree to provide. But there may be implications of hiding employment as I've mentioned above, even though it's overseas, remote, and that company has no presence in your country.

I wonder whether the company I work for is trying to cut some corners, labeling me as a contractor rather than a full-time employee

They definitely do it to have a cheaper person to do the work, yes. But raising this and demanding benefits is most likely to spectacularily backfire rather than them deciding "oh yes, we want to spend all this extra on you because you seem to be like an employee". More likely they will start looking to replace you immediately, just like if you suddenly demanded a lot more money for whatever reason. If they can get the same service cheaper, why overpay?

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In NZ - a couple of things you mentioned might blur the lines between Contractor and Employee... But not necessarily.

The contract I have signed requires me to work only with this company;

This is one of those where it can be used to indicate that someone is an Employee, not a Contractor. However, it is context specific - for example, at one company, we hired a Contractor to help with some development work, it was a 3 month Contract - during that time he worked exclusively for our company. It would have been conceivable that during this time he was excluded from working with other companies due to the nature of the work he was doing with us.

The company has set hours for which I must be "on the clock" which cover my entire working week;

This is another one that does blur the line, however again, Context is key. Going back to the above Contractor - we expected him to be in the Office from ~9-5 as that's when the rest of the team that were also working on this project were in the office. That said, a couple of times he did say 'I won't be in on this day/time' and that was that. If your company doesn't accept you doing this (without good reason) - then that would add weight to you being an employee.

And by Good reason I mean for example "No, we are going live with project on that day and we need your assistance for any critical issues that might happen on Go-Live"

I am expected to participate in company's in-person meetings;

This one is a little more nuanced - Our Contractor was expected to be in the meetings that specifically pertained to his task - but everything else e.g. team stand-ups, 1:1s, All-Hands etc. he wasn't expected to attend.

I am required to communicate (and sometimes negotiate) when I want to take time off to my supervisor;

Communicating Time Off is fine, Negotiating (as above) is sometimes fine, however - Supervisor? That is where I would start to think this sounds more like an Employee. Our Contractor didn't have a 'Supervisor' - I mean, he worked in our team and would discuss issues with my Boss, but my Boss wasn't his Boss. He didn't have a Boss.

I have one question for you - and this is perhaps the most important one:

Do you give this company an invoice, with your hours worked and your hourly rate? Do they then pay that Invoice?

Edit: Because that's perhaps the most important difference. And I don't mean a filled in Time sheet. If you aren't issuing an invoice to the company and then they pay the invoice - you are an Employee, not a Contractor.

The other things you've mentioned are certainly other factors and depending on circumstance can have significant weight - but that's the biggest one IMO.

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  • Note that the OP may have to submit both an invoice AND a timesheet, and the invoice have some relationship to the timesheet. Working as a consultant frequently requires both.
    – jmoreno
    Aug 22, 2023 at 22:59
  • Added the answer to your question to my post. Oh, and I'm required to participate in daily stand-ups too.
    – smith85
    Aug 29, 2023 at 14:49
  • @smith85 - Is everything you are being asked to do in the consulting agreement?
    – Donald
    Sep 8, 2023 at 9:44
  • Even the SUpervisor is ok - call it coordinator. 5 contractos on a site doing work on same premises / similar project and you need someone to supervice and coordinate that, as well as to sign off on the work done. Pretty standard i.e. in the building industry (need a LOT of different contractors to finish i.e. the interior of an apartment). It really depends on the length of assignment primarily.
    – TomTom
    Sep 10, 2023 at 8:42
  • A co-ordinator though is different from an office supervisor. Especially when talking about a building site. In NZ we'd call thar type of person either a Project Manager (fancy/large scale projects) or a site foreman (who makes sure everyone plays nice) Sep 10, 2023 at 9:15

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