Category Archives: Contingent Workers

06.22.17
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California May Tip The Scales, When It Comes to Tipping Independent Contractor Drivers

IMG_1078Should ride-hailing services (like Uber and Lyft) be required to offer a tip option if you pay by credit card? A proposed California law says yes.

A.B. 1099, passed by the California Assembly and headed to the State Senate, would require modification of these mobile apps to support credit card tipping. The bill, in its current form, takes no position as to whether these drivers are independent contractors or employees, instead calling them “workers,” but the proposed law is another attempt to legislate controls on the gig economy, rather than letting free market forces play out.

Gov. Jerry Brown has not taken a posiiton on the bill, and it may or may not survive in the California Senate.

Continue reading →

06.19.17
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When an Employee Double-Dips On a Paycheck, Who Pays?

Remember this?

Suppose the chip is a check, and the employee tries to cash it twice? Who would you rather be, Costanza or Timmy?

Staffing agency clients are increasingly pointing to a fraud committed by disloyal short-term employees. They cash a paycheck on their mobile app, then deposit the paper check a second time for duplicate payment. The check clears twice. Who must pay?

While this problem can arise in many scenarios, including with regular W-2 employees, it seems to be occurring more frequently with staffing agency employees, PEOs, temps, and other short-term workers. So let’s take a look.

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06.15.17
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Five (More) Signs Your Independent Contractor May Be Properly Classified

IMG_1079Last week I posted Five Signs Your Independent Contractor May Be Properly Classified. While I feel pretty good about the post, I also feel like there’s more where that came from. So here goes.

Five More Signs Your Independent Contractor May Be Properly Classified:

  1. The contractor has its own employees. Since contractors are in business for themselves, they should be free to hire their own employees. If they actually do, chalk up a few points.
  2. The contractor pays its own expenses. One indicator of a legitimate independent contractor relationship is that the contractor, if a sound businessperson, will earn a profit but, if a poor businessperson, will incur a loss. The profit/loss determination is often a function of how well the contractor prices its services. If you reimburse a contractor for all of its expenses, the risk of loss is generally removed. Legitimate independent contractors should be bearing some risk.
  3. The contractor works from its own office space. The flexibility to work wherever and whenever suggests proper classification as an independent contractor.
  4. The contractor works using its own tools and equipment. That’s more evidence that the contractor is running its own business and has more opportunity to incur a net loss.
  5. The contractor carries its own insurance. When a contractor carries the types of insurance typically carried by a business, the contractor is likely operating as a business. Look for General Commercial Liability and Workers Comp coverage.

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06.12.17
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Joint Employment Is Like Taking Steroids By Accident

athlete-joint employment - staffing agency - 1840437_1920It seems like every month another professional athlete is caught using a prohibited substance. The typical script (after getting caught) is to blame the maker of a supplement. “I should have more carefully checked the label,” or “I had no way of knowing what was in that synthetic elephant urine.”

Fair or unfair, every athlete knows that he/she is responsible for what goes into the athlete’s body, whether the juicing was intentional or not.

The same rule applies to companies who use staffing agencies.

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06.08.17
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Labor Dept Withdraws 2015-16 Joint Employment, Independent Contractor Guidance

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Did the new Labor Secretary of Labor finally throw employers a bone? I think so, but it’s too early to tell whether it’s delicious bacon-flavored or some generic processed meat flavor.

On June 7th, the Department of Labor (DOL) announced it was withdrawing the 2015 and 2016 informal guidance on joint employment and independent contractors.

Read the full post here, on BakerHostetler’s Employment Law Spotlight blog.

06.05.17
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5 Signs Your Independent Contractor May Be Properly Classified

IMG_1076In March, we posted Five Signs Your Contractor May Be Misclassified (with Bob Seger lyrics!). Today we look at the other side of the same coin. While there is no sure fire, (Silver) bullet (Band) proof assurance that your contractor relationship will withstand a legal challenge, there are some facts that tend to strongly support legitimate independent contractor status.

Here are 5 signs your independent contractor may be properly classified.

  1. The contractor has an LLC or Corporation. When the IRS or DOL performs an independent contractior misclassification audit, the first thing it is likely to ask for is a list of who received 1099s in the past year. Receipt by individuals suggest possible misclassification. Companies are less of a flag.
  2. The contractor has other clients. The true hallmark of an independent contractor is that the person is in business for him/herself. Having other clients is a strong sign that the contractor is running a legitimate independent business.
  3. The contractor advertises its services in the marketplace. This may take the form of having a web page, flyers, even Facebook ads. Anything that suggests that the contractor is running a business and seeking buyers of its services is strong evidence in support of legitimate independent contractor status.
  4. Your relationship with the contractor is project-based or for a fixed term. Open-ended relationships resemble at-will employment. While a fixed-term relationship can still exist in employment, it’s better than indefinite. Best of all, though, is a project-based engagement. Retain the contractor for a particular project. When the project ends, the relationship ends. Period.
  5. The contractor is not a former employee of your company. Companies sometimes rebrand former employees as contractors. That’s generally too cute. Receipt of a W-2 and 1099 by the same person is a big fat red flag.

Continue reading →

05.30.17
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Podcast: What You Need to Know About Independent Contractor Misclassification

IMG_1073This week, I am encouraging readers to tune in to this podcast from XpertHR, in which I discuss issues and hot topics related to independent contractor misclassification.

Topics covered include:

  • The attack on business models that rely on the use of independent contractors;
  • The future of misclassification claims;
  • Possible updates to the FLSA;
  • Industries that are most at risk for independent contractor misclassification claims; and
  • Common misconceptions.

I hope you enjoy this interview, and thank you to David Weisenfeld and Xpert HR.

05.25.17
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Security Guards: Employees or Contractors?

security guard employee or independent contractorI never saw the movie Paul Blart: Mall Cop and almost certainly never will. (Do I really need explain that decision?)

The Independent Contractor vs. Employee question often arises in the context of security guards, though. I confess to not knowing how Paul Blart was classified but, for companies who retain security guards, the decision whether to hire them as employees or to contract with a security firm is an important one.

The main advantage of hiring security guards as employees is the ability to retain control over how an individual guard does the job. The company can select who it wants to work and when, and can provide as much supervision and direction as needed.

The biggest disadvantage to using employees for security work, however, is the risk of Continue reading →

05.23.17
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Court Rejects Mandatory Arbitration for Independent Contractor Truckers

truck independent contractor arbitrationArbitration agreements can be an effective way to manage disputes with independent contractors. The Federal Arbitration Act (FAA) and Supreme Court decisions support arbitration as an efficient way to resolve disputes outside of the courtroom.

But what happens when an independent contractor with an arbitration agreement claims to have been misclassified as an employee? Can these disputes be forced into arbitration?

Usually yes, but this blog post by my colleague, John Lewis, highlights the limitations of arbitration agreements when applied to transportation workers. Although federal public policy — as articulated in the FAA — generally favors arbitration as a way to resolve disputes, Section 1 of the FAA lists a few situations where the FAA does not apply. One type of excluded dispute is over “contracts of employment” with transportation workers.

Are independent contractor agreements with owner-operator truckers “contracts of employment” with transportation workers? Continue reading →

05.21.17
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WhoIsMyEmployee.com named “Featured Blog of the Week” by American Bar Association’s ABA Journal

Thanks to the ABA Journal for recognizing WhoIsMyEmployee.com as its Featured Blog of the Week for the week of May 18, 2017. I appreciate the recognition!

To my readers: I hope you have been enjoying the blog, and I encourage you to email me with ideas for posts, along with any questions or comments.

Thanks!

Todd Lebowitz

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