By Greg Allan, tradesman and creator of Data First Coaching
How do you tell a contractor from an employee in your pest control business?
You don't decide this by the paperwork someone hands you or what you've agreed to call them. According to Employee or contractor?, a contractor is self-employed, earns income by invoicing for their work, has no employment agreement, and sits outside most employment-related law. To check a worker's status, you can first run the gateway test, and if they don't meet every part of it, you move to the common law test.
Inland Revenue takes the same line from the other side. According to Self-employed or employee, there is no single test, and the working conditions agreed in the contract or verbally decide the answer, not whether you or the technician describe the arrangement as employment or self-employment. A technician who provides their own gear, arranges their own training and controls how they get the job done leans toward contractor. One who works to your schedule, your van, your chemical and your method does not.
Why does this get confusing during termite season and pre-purchase inspection spikes?
Most pest control businesses don't sit still across the year. A run of pre-purchase inspections, a termite season surge, or a batch of new service agreements landing at once can mean a business needs more hands on the road for a stretch, then quiet again. The temptation is to bring someone on as a contractor because it feels flexible and doesn't commit to ongoing wages.
The trouble is the label doesn't follow the convenience. If that technician is told which jobs to do, what times to turn up, which chemical to use and how to write the report, the relationship can look like employment regardless of what the arrangement was called at the start. A pest controller who treats this loosely during a busy run can end up with the wrong status on the books, and with no clear answer on who carries the warranty if a treatment fails and a callback follows.
What do the tests actually look at?
The tests look past the title and at how the work actually happens. Inland Revenue's interpretation guideline IG 16/01 sets out a control test, an independence test and a fundamental test, asking whether the person is in business on their own account. See IG 16/01: determining employment status for tax purposes.
A high level of control over how a technician carries out a termite barrier treatment or a general pest job points toward employee. A high level of independence, where the technician runs their own business, sets their own methods and could reasonably refuse the job, points toward contractor. Inland Revenue also makes clear elsewhere that calling someone an independent contractor doesn't change their status if, in substance, they're still working as an employee.
What does this mean for licensing and health and safety responsibility?
Under the Health and Safety at Work Act 2015, the label doesn't remove your duties. According to Introduction to the Health and Safety at Work Act 2015, a worker can be an employee, a contractor, a subcontractor or an employee of a contractor, and all of them are covered. A PCBU, which your pest control business is, must ensure, so far as reasonably practicable, that the health and safety of workers and others isn't put at risk by the work, including contractors and their own workers, under section 36 of the Act (see PCBUs working together).
For a pest controller, that means chemical handling, licensing checks, commercial and food premises compliance, and the quality of the report handed to the customer, don't become someone else's problem just because the technician invoices rather than gets paid wages.
Why does the real cost of a technician matter more than the label?
Contractor or employee, the number that actually matters to your business is what that technician's time costs you against what it earns you. Greg teaches that owners often stall on taking on extra help, contractor or employee, because they wait for the bank account to prove it can carry a full year's cost, instead of trusting known costings on the jobs already running to show when the extra capacity pays for itself.
Picture a pest controller whose team paperwork, inspection forms, site inductions, incident records and onboarding for a new technician, was scattered across different folders and a separate messaging app, with no single place that pulled it together against the jobs actually booked in. Compliance records existed, but nobody could see them against the work in one place. AI agents, software that handles a task the way the owner would, using their own prices, wording and rules, can carry that recurring paperwork so the forms, the inductions and the incident register sit against the job itself, whichever way the technician is engaged.
This matters because a data first view of the business, starting from the owner's own job and pay records rather than memory, is what tells a pest controller whether a termite season surge, a new service agreement or a round of pre-purchase inspections is actually profitable once the true cost of the hands on the job is counted in. AI agents taking on that record keeping free the owner to spend the time on customers and the crew instead of chasing paperwork at the end of the quarter.
This is general information, not legal, tax or employment advice. Check your own situation with the body named here or a qualified adviser.
Where can you check the current rules?
- Employee or contractor? covers the gateway test and the common law test used to check a worker's status.
- Self-employed or employee covers Inland Revenue's working conditions approach and the self-employed guidelines.
- IG 16/01: determining employment status for tax purposes sets out the control, independence and fundamental tests in detail.
- Introduction to the Health and Safety at Work Act 2015 explains who counts as a worker and a PCBU under the Act.
- PCBUs working together: advice when contracting covers the primary duty under section 36 when contractors and subcontractors are engaged.
How does Data First Coaching approach this?
Data First Coaching doesn't start from the contractor versus employee question on its own. It starts from the owner's own job and pay data through the Trade Business Intelligence, to see what a technician, contractor or employee, actually costs against what their time earns across termite season, inspections and service agreements. That often shows the real question isn't the label at all. Greg puts it plainly: “it's not about the employee.” The how, the costings, the records, the agents that carry the paperwork, is worked through inside the Academy, with members, because the Trade Business Intelligence is powered by every member, for every member, and that only works with owners who are open minded, innovative and willing to share.
