There are many ways to determine whether someone should be classified as an employee.
Usually, when employers have the right to tell employees when and where they will work and how they will perform their job duties, there will be an employee-employee relationship. Employers can also request written reports, evaluate work performance, set wage rates, and reserve the right to review any work results. Of course, the employer can also hire and dismiss employees at will, unless the labor contract signed by the employer and the employee provides otherwise.
Employers may try to treat employees like independent contractors to avoid paying the various benefits that employers must provide for their work.
They typically include workers' compensation insurance premiums, social security benefits, unemployment insurance benefits, temporary disability, tax withholding, and minimum wages and overtime. Paying wages to employees as an independent contractor is basically "off-the-record" payment, which violates state and federal labor laws. These regulations are formulated to prevent misclassification and abuse, to prevent employers who engage in such illegal activities from gaining a competitive advantage over employers who abide by the rules.