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Independent Contractors And Employees: Essential Employment Law For Employers And HR Professionals

Anthony Burgess

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Published in Independent Contractors And Employees (Employment Law Series)

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Confusion Over Employee Misclassification

In the wake of a number of high-profile cases, such as Uber and Lyft being sued by their drivers for misclassifying them as independent contractors, there has been a great deal of confusion over the difference between employees and independent contractors. This confusion can lead to significant legal and financial risks for employers.

The Difference Between Employees and Independent Contractors

One of the most important distinctions between employees and independent contractors is the degree of control that the employer has over the worker. Employees are typically subject to the employer's control in terms of when, where, and how they work. Independent contractors, on the other hand, are typically free to set their own hours and work in their own way.

Another important distinction is the level of economic dependence that the worker has on the employer. Employees are typically economically dependent on their employer, meaning that they rely on the employer for their income. Independent contractors, on the other hand, are typically not economically dependent on any one employer.

Independent Contractors and Employees (Employment Law Series)

by LandMark Publications

5 out of 5

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The Legal Risks of Misclassifying Workers

There are a number of legal risks associated with misclassifying workers as independent contractors. These risks include:

Back taxes and penalties: The IRS can impose significant back taxes and penalties on employers who misclassify workers as independent contractors.
Wage and hour violations: Employees are entitled to minimum wage and overtime pay, while independent contractors are not. Misclassifying workers as independent contractors can lead to wage and hour violations.
Employee benefits: Employees are entitled to certain benefits, such as health insurance and paid time off, while independent contractors are not. Misclassifying workers as independent contractors can deprive them of these benefits.
Workers' compensation: Employees are entitled to workers' compensation benefits if they are injured on the job, while independent contractors are not. Misclassifying workers as independent contractors can leave them without workers' compensation benefits if they are injured.
Unemployment insurance: Employees are entitled to unemployment insurance benefits if they lose their job, while independent contractors are not. Misclassifying workers as independent contractors can deprive them of unemployment insurance benefits if they lose their job.

How to Avoid Misclassifying Workers

There are a number of steps that employers can take to avoid misclassifying workers as independent contractors. These steps include:

Review the IRS guidelines. The IRS has published a number of guidelines that can help employers determine whether a worker is an employee or an independent contractor.
Consider the economic realities of the relationship. The economic realities of the relationship between the employer and the worker are one of the most important factors in determining whether the worker is an employee or an independent contractor.
Get legal advice. If you are unsure whether a worker is an employee or an independent contractor, it is important to get legal advice.

The distinction between employees and independent contractors is a complex one. However, by following the steps outlined above, employers can avoid misclassifying workers and the legal risks that come with it.

About the Author

The author of this book is a leading expert on employment law. She has written extensively on the topic of employee misclassification and has represented both employers and employees in misclassification cases.

Free Download Your Copy Today

This book is an essential resource for any employer or HR professional who wants to avoid the legal risks of misclassifying workers. Free Download your copy today and learn how to protect your business and your employees.

Independent Contractors and Employees (Employment Law Series)

by LandMark Publications

5 out of 5