Walters, who is a consultant with the FiveL Company in Westminster, MD, gave her recommendations at SHRM’s Employment Law and Legislative Conference, held recently in Washington, DC.
The IRS has a somewhat different approach to making the distinction between an employee and an independent contractor (go here for the EEOC’s guidelines), says Walters. It looks at behavioral control, financial control, and the relationship of the parties.
The issue here is whether there is a right to direct or control how the worker does the work. A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done—as long as the employer has the right to direct and control the work. For example:
If you receive less extensive instructions about what should be done, but not how it should be done, you may be an independent contractor. For instance, instructions about time and place may be less important than directions on how the work is performed.
These facts show whether there is a right to direct or control the business part of the work. For example:
These are facts that illustrate how the business and the worker perceive their relationship. For example:
Operate in multiple states? That's a real compliance challenge, but with 50x50 (50 Employment Laws in 50 States); answers are at your fingertips. Wage/hour? Leave? Child labor? Discrimination? All there in easy-to-read chart form. Get more details.
The Supreme Court has said that there is no definition that solves all problems relating to the employer-employee relationship under the Fair Labor Standards Act (FLSA). The Court has also said that determination of the relation cannot be based on isolated factors or upon a single characteristic, but depends upon the circumstances of the whole activity.
The goal of the analysis is to determine the underlying economic reality of the situation and whether the individual is economically dependent on the supposed employer. In general, an employee, as distinguished from an independent contractor who is engaged in a business of his own, is one who "follows the usual path of an employee" and is dependent on the business that he serves. The factors that the Supreme Court has considered significant, although no single one is regarded as controlling are:
Don’t forget to check state codes and regulations, says Walters, as nearly half the states have passed legislation related to independent contractors.
Do you have operations in multiple states? Actually, there are about 4 dozen key laws with important state differences. Where are you going to go to find out about all your state law obligations?
It’s not easy to track the ins and outs of different laws in different states—and that’s where the 50x50 comes in.
50 Employment Laws in 50 States, 2011 Edition is the revolutionary guidebook that puts ALL the most need-to-know employment law information—for each of the 50 states—right at your fingertips.
Imagine the time and frustration you'll save with this authoritative, instant-information reference. In just seconds, you'll zero in on the precise information you need whenever you must:
Finally, an easy-to-use state law guide for all 50 states plus DC and Canada! 50x50 (50 Employment Laws in 50 States) guide is the authoritative guide to 50 of the most crucial employment laws. Easy-to-read chart format. No legalese. Just updated for 2012. Get more information here.
With 50 Employment Laws in 50 States, 2011 Edition, you get the exact guidance you need whenever you need to understand ANY state law concerning:
Family and medical leave
Benefits for same-sex partners and common-law spouses
Tobacco use on the job
Meal and rest breaks
Health insurance continuation
New hire reporting
Arrests and convictions
Small necessities leave
Jury duty leave
Social security numbers
Employment at will
Organizing by public employees
Payment of commissions
Title VII equivalents
Other discrimination and harassment laws
State and local equal employment opportunity laws
To make sure your 50 Employment Laws in 50 States remains up to date, we closely monitor changes in employment law in all 50 states. Each year we'll rush you a replacement edition on a 30-day-review basis, and bill you at the then-current rate. You pay only if you decide to keep the update.
Bonus:50 Employment Laws in 50 States has recently been revised and expanded to include Canadial laws.
Get fast answers with this chart-based, 50-state reference guide. Includes all corresponding regulations, statutes, and court cases so you can easily find the source documents if you need to.
Order or get more information.
If you have comments about this tip and want to post them on this page to share your thoughts with other HR Daily Advisor readers, simply enter your comments below. NOTE: Your name will appear on any comments posted.
Copyright © 2013 BLR Business & Legal Reports Reproduction in whole or in part without permission is prohibited.