South Dakota Administrative Rules › Title 47 - Department of Labor And Regulation › Article 47:03 - Workers' compensation › Chapter 47:03:10 - Independent contractor affidavit of exempt status › Appendix B - EXEMPT STATUS FACT SHEET

Current through Register Vol. 51, page 10, July 15, 2024
An independent contractor is defined by law as one who engages to perform certain services for another, according to his own manner and method, free from control and direction of the contractor in all matters connected with the performance of the service, except as to the result or product of the work. Below are statements to help you decide if you are an independent contractor. No one statement is controlling, and your status is based on all the facts in your situation.
1. The nature of the contract between you and the contractor shows you are independent from the contractor. For example: Is there a written contract where you agree that you are an independent contractor? Do you maintain commercial general liability insurance or other business insurance?
2. The contractor exercises no control over the details of your work or independence. Do you exercise control over the details of the work? Do you create plans or specifications for the job? Do you set your own work hours?
3. You are engaged in a distinct occupation or business for others. Do you work for a company or individual other than the Contractor? Do you work for a competitor of the Contractor? Does your business have a logo or uniform?
4. Do you have a sales tax license? Do you have a contractor's excise tax license?
5. You cannot complete the affidavit if you are a subcontractor who is also an employer. Do you have employees?
6. Is your business incorporated? If you do business as a corporate entity you are typically considered an employee of the corporation and cannot complete the affidavit.
7. Your job is the kind of occupation where the work is usually performed by a specialist without supervision, and not under the direction of the contractor.
8. Your occupation requires special skills, license, education, or training.
9. The contractor does not supply the things needed to perform your job such as the tools and the place of work. Do you operate a vehicle owned by the contractor? Was the work performed at your business or the contractor's business location or jobsite?
10. The length of the job and how long you have worked for the Contractor does not show that you are really an employee. For example: Is this a one-time job, or will you be doing this for the contractor regularly?
11. You are paid as a separate contractor, not as an employee. Do you invoice the Contractor for your services? Do you file a federal income tax return for your business? Do you expect to receive an IRS Form 1099 from the Contractor?
12. Your work is not the regular business of the Contractor.
13. You do not have the right to terminate the relationship without liability. For example: If you quit before the job is finished, is there a penalty?
Based upon these factors, do you believe that you are an independent contractor with exempt status?
_______________________ Signature ________________________________________
(WRITE YES OR NO) (INDEPENDENT CONTRACTOR/EXECUTOR)
Note: An employer who knowingly solicits or requires an employee or subcontractor to execute an affidavit when the employer knows that the employee or subcontractor is required to be covered under a workers' compensation insurance policy is guilty of a Class 2 misdemeanor.