Employee versus independent contractor: sometimes a slippery slope

On Behalf of | Sep 14, 2016 | Employment Litigation |

State and federal employment officials and regulators often take pains to walk a very fine line when discussing the use of contracted-for labor by companies across the country.

On the one hand, they appear to acknowledge and support the need for an at-the-ready independent contractor pool, knowing that it lends flexibility to business managers, keeps projects moving forward and gives opportunity for additional workers to earn money and build new businesses. As noted on a website page authored by the Wage and Hour Division of the U.S. Department of Labor, “the Department supports the use of legitimate independent contractors, who play an important role in our economy.”

On the other hand, though, there is concern, which coalesces around that word “legitimate.” According to state and federal agencies, some businesses across the country, including in California, don’t play fair in their classification of workers. These companies are accused of falsely labelling employees — to whom they would have to pay a full panoply of benefits — as independent contractors because they are much less expensive.

The above-noted website calls employees who are wrongly termed as independent contractors “one of the most serious problems facing affected workers, employers and the entire economy.”  Some state and federal agencies, notably California’s Division of Labor Standards Enforcement and the federal National Labor Relations Board, have taken such an aggressive position on this that the even legitimate use of independent contractors has come under attack.

The challenge for employers using independent contractors then is to understand the factors that go into the classification determination and make sure they are following those factors in a realistic and practical way. Simply calling a worker an independent contractor or even having a written agreement that says that is not enough. The determination depends on the actual working relationship of the worker and the company as it plays out over time.

Business managers might have good-faith questions and concerns regarding their classification of workers, and a proven employment attorney can provide assistance to them, as well.

A host of state and federal enactments make labor law a complex and sometimes bewildering legal realm. An attorney well versed in the subject matter and vested with on-point experience can lend guidance and provide clarity in matters involving both workers and employers.

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