Typically, employees tend to be paid a fixed wage or salary by
the week or month - and often qualify for additional payments such
as overtime, long service bonus or profit share. Independent
contractors, on the other hand, are often paid a fixed sum for a
particular job.
Care must be taken with this aspect as it is often
inconclusive. There are many examples of employees, who are paid by
the piece or on the basis of commission, and, equally, there are
many self-employed individuals, who charge by the hour or day. The
hourly payment basis may, such as with many plumbers, accountants
and lawyers, merely be a way of charging their time out and
ascribing value to the work done.
It is sometimes more helpful to see what underlies the method
of payment. For example, does the hourly payment method enable the
engager to exercise control over the worker (see
ESM1013 to 1029)? If he can, this is a
strong pointer towards employment.
On the other hand, where an individual is paid entirely by
commission but has to meet expenses to undertake the work this
involves real financial risk which is a strong pointer to
self-employment. Also, a car mechanic might be paid a retainer, not
in return for services, but for ensuring that the payer will be
given priority over other work. This is not indicative of
employment.
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