Suttons Bay Law

Increasingly, workers and lawyers around the country are bringing lawsuits challenging the workers’ classification as independent contractors instead of employees. Often, companies look for opportunities to hire independent contractors instead of employees in order to avoid payroll taxes and employee benefit packages. The problem surfaces when a decision is driven solely by the desire to save money and not by an objective analysis of the job function.

Ultimately, the question of whether someone is an employee or an independent contractor must be determined by a multi-part analysis of the terms and conditions of the relationship and of the level of autonomy the worker has in performing her duties. The mere fact that the company classified someone as an independent contractor, or even a written agreement between the parties saying that the worker will be an independent contractor, will not be dispositive of the question.

Two pieces of legislation (the Independent Contractor Proper Classification Act and the Employee Misclassification Prevention Act) that stalled in last year’s Congress can be expected to resurface this year. Collectively, they would increase the Internal Revenue Services’ options for challenging the independent contractor designations and could result in greater liability for companies that misclassify workers.

Dirk Beamer
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Tags: Employment Law //