EMPLOYEE MISCLASSIFICATION
EMPLOYEE v. INDEPENDENT CONTRACTOR
Not all workers are employees as they may be volunteers or independent contractors. With independent contractors, an employer generally does not have to pay payroll taxes, the minimum wage or overtime, or comply with other wage and hour law requirements such as providing meal periods and rest breaks, or reimburse their workers for business expenses incurred in performing their jobs. Additionally, employers do not have to cover independent contractors under workers’ compensation insurance, and are not liable for payments under unemployment insurance, disability insurance, or social security.
There is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor. Generally, a multi-factor test is used that primarily focuses on whether the employer controls the worker both as to the work done and the means in which it is performed. There are many other additional factors that are also considered.
In addition, since different laws may be involved in a particular situation such as a termination of employment, it is possible that the same individual may be considered an employee for purposes of one law and an independent contractor under another law. Because the potential liabilities and penalties are significant if an individual is treated as an independent contractor and later found to be an employee, each working relationship should be thoroughly researched and analyzed before it is established. Thus, we urge you to consult with an attorney to better understand your rights in your particular situation.
There is no set definition of the term "independent contractor" and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor. Generally, a multi-factor test is used that primarily focuses on whether the employer controls the worker both as to the work done and the means in which it is performed. There are many other additional factors that are also considered.
In addition, since different laws may be involved in a particular situation such as a termination of employment, it is possible that the same individual may be considered an employee for purposes of one law and an independent contractor under another law. Because the potential liabilities and penalties are significant if an individual is treated as an independent contractor and later found to be an employee, each working relationship should be thoroughly researched and analyzed before it is established. Thus, we urge you to consult with an attorney to better understand your rights in your particular situation.
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