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    The Difference Between an Independent Contractor and an Employee

    Last updated 1 year ago

    When you become a licensed contractor and set up your own company, you will typically be providing your services as an independent contractor. As an independent contractor, you will be subjected to different IRS tax laws and obligations than an employee. Here is how to determine the difference between an independent contractor and an employee:


    An employee is any individual who provides services to a business. In the employee-business relationship, the business will determine what services are performed and will train the employee. Even if the employee has a great deal of freedom in his or her working actions, he or she will still be considered an employee if the business has control over the details of the work that is performed. An employee of a business will need to fill out all of the forms associated with employee taxes.

    Independent Contractor

    An independent contractor controls the method and results of the work that he or she does. Workers such as doctors, lawyers, accountants, and contractors are all examples of independent contractors. When you are working as an independent contractor, you will have your own business license for your services. Independent contractors are considered self-employed, and must follow the IRS self-employed tax regulations.

    Type of Relationship

    One way to tell if a worker is an employee rather than an independent contractor is to look at the type of relationship established between the business and the worker. If the worker sets his own hours, furnishes his own tools, and provides the same type of services to a variety of customers or businesses, he or she is most likely an independent contractor rather than an employee.

    When you receive your contractor license from Arizona Contractor License Center of Phoenix, our team of experienced professionals will help you establish your business. By working with us, we will provide you with the information and assistance you need to create a relevant business entity for your construction company. To learn more about the business services and exam preparation we provide to construction contractors, call us at (888) 738-3175 or contact us online. 

    What Happens if You Get Injured on the Job as a Contractor?

    Last updated 1 year ago

    As a licensed construction contractor in AZ, you will control your own company and provide construction services to a variety of clients. If you get injured on the job as a contractor, you can still be eligible for compensation, even though your relationship to the employer is different than that of a traditional employee. Let’s take a look at what happens if you get injured on the job as a contractor:

    Worker’s Compensation

    All employers in Arizona must provide their employees with worker’s compensation insurance. Worker’s compensation will provide medical and compensation benefits if an employee is injured while on the job. This type of insurance is “no-fault” insurance, meaning that employees are entitled to benefits no matter what has caused the accident. Worker’s compensation insurance guarantees that all employees will be covered if they experience a work-related injury.

    Insurance for Independent Contractors

    If an independent contractor is injured while working, his or her eligibility for worker’s compensation will typically be determined on a case-by-case basis. While businesses are required to provide worker’s compensation for all employees, they are not required to cover independent contractors. However, a court can decide whether the individual was working as an independent contractor or an employee at the time of the injury. Depending on the duration of the employment, the extent that the employer had control over the contractor’s work, and the way that the contractor received payment, the independent contractor may be considered an employee eligible for worker’s compensation benefits.

    If you are considering becoming a licensed construction contractor, contact Arizona Contractor License Center. We can help you prepare for your license exam and provide you with the tools you need to set up your company once you are fully licensed. To learn more about the benefits of receiving your contractor’s license in AZ, call us in Phoenix at (888) 738-3175. 

    What Kind of Experience Do You Need to Be a Contractor?

    Last updated 1 year ago

    In order to obtain your Arizona State Contractor’s License, you will need to demonstrate experience in a related field. You can receive experience credit for working as a journeyman, foreman, supervising employee, or a contractor. When you claim experience for your licensing application, you will need to have the experience verified by an employer, a fellow employee, or any other person that has first-hand knowledge of your work experience. If you do not have the required work experience, you can receive experience credit for technical training, apprenticeships, or an educational program.

    The contractor licensing experts at Arizona Contractor License Center will provide you with the tools and education you need to pass the contractor licensing test. When you work with our instructors, we guarantee that you will pass the test and receive your license. To learn more about enrolling in our test prep program, call our Phoenix educational center at (888) 738-3175. We provide contractor license exam preparation for individuals statewide. 

    Where Can You Obtain Your Contractor's License?

    Last updated 1 year ago

    In order to obtain your contractor’s license, you will need to contact your State Contractor’s Licensing Board. By working with your state government, you will be able to learn all about the individual licensing requirements in your area. To learn more about obtaining your contractor’s license, watch this video from 501 Contractor Tips.

    If you are looking to obtain your contractor’s license in AZ, the Arizona Contractor License Center can help you. We will provide you with exam prep services that will prepare you for the state licensing test, and our contractor licensing specialists will support you through the entire contractor’s license application process. To learn more about how we can help you set up your contracting business, call us at (888) 738-3175 or contact us online. 

    Tips for Being a First-Time Contractor

    Last updated 1 year ago

    After passing all of the tests and setting up your business, taking the first step into self-employment can be daunting. You’re essentially starting with a blank slate, which can put you at a disadvantage if you don’t take steps to properly jumpstart your business. Here a few tips to help make the transition easier and help you become a successful contractor:

    Advertise Your Business

    As a new contractor, marketing your services will be one of the biggest challenges you’ll face. Be sure to register your business with local job referral services, sign up for any memberships or customer review sites that can increase your visibility, and begin a portfolio of your work immediately. You’ve worked hard to become a licensed professional, so be sure to use your credentials to your advantage. Always assume you’re dealing with an informed homeowner and do your research to avoid common contractor bidding mistakes.

    Build Professional Relationships

    Due to the nature of independent contracting, chances are you’ll have to work with various suppliers or subcontractors for different jobs. Take the time to build strong professional relationships, but don’t be afraid to shop around for competitive offers to save money on your bottom-line. Be aware that unfinished projects will reflect poorly on your professionalism, so don’t risk your reputation by dealing with unreliable colleagues.

    Organize Your Finances

    As a business owner, you’re responsible for every dollar you make, and you’ll have to deal with taxes, licensing fees, permits, and a host of other expenses. Consider hiring an accountant (which is tax deductible) to keep all of your business expenses in proper order and avoid any legal or financial pitfalls. As a licensed professional and business owner, your responsibilities include reliable money management and a certain level of transparency when it comes to providing estimates.

    Get all of the information and resources you need to become a successful contractor from the Arizona Contractor License Center. Follow the link to find a location nearest you, or call (888) 738-3175 today for more information about our services.

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