Employee versus contractor classification is a significant issue because it can have major economic consequences for workers and employers. There are also two "core factors" that are considered: the nature and degree of the worker's control over the work, and the worker's opportunity for profit or loss based on initiative and/or investment. Additionally, there are three other factors that may be considered as guideposts in the analysis: the amount of skill required for the work, the degree of permanence of the working relationship between the worker and the potential employer, and whether the work is part of an integrated unit of production. Misclassification of employees as independent contractors can result in liability under the FLSA for unpaid minimum wage and/or overtime compensation.

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