What you don’t know can hurt you.
Claims of independent contractor misclassification can sneak up on companies that don’t even know they have a problem.
Businesses usually treat the retention of contractors as an expenditure, not an increase in headcount. Since no new employees are being hired, Human Resources Departments and Legal Departments often have no idea when operations managers have retained contractors–sometimes at distant locations.
When I was an undergrad at Michigan, any time I would drive to the airport or to Tiger Stadium, I’d see billboards for Deja Vu, a strip club with (apparently) lots of locations. I never visited (not into that sort of thing, thanks for asking), and I never thought much of it. I certainly did not expect to be writing about Deja Vu and independent contractor misclassification 25 years later. But here goes.
When patrons of these fine establishments partake in the traditional lap dance, it’s doubtful they’re thinking about whether these often-single-mom “entertainers” who are just trying to make a living have been properly classified under wage and hour law. More likely, they’re thinking about — never mind.
But that’s an important issue, as Deja Vu recently learned, when it was sued by a class of 28,177 dancers alleging they were misclassified as independent contractors, rather than Continue reading
This 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:
I hope you enjoy this interview, and thank you to David Weisenfeld and Xpert HR.
I 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
Have you ever heard someone say, “The definition of insanity is doing the same thing over and over and expecting a different result“? That’s just wrong. No, it’s insanely wrong. (Irony! Actual definition, click here).
My consistent advice to companies that use independent contractors is to be proactive. Review your policies, practices, and documents now — before you get sued or audited. Many take this advice. Those who do not generally give two reasons:
Folks, that kind of thinking is: n. extreme foolishness; folly; senselessness; foolhardiness.
Here are a few quick facts:
What is a “temporary employee”? I have practiced employment law for 20 years (Note to self: Keep practicing; someday you’ll get good at it.) and I can’t tell you. It’s a state secret. All lawyers have been sworn to secrecy forever.
Either that or, if you really want to know and say “pretty please” (with or without sugar on top, but no artificial sweetener please), that term has no legal significance. Usually the term is used to mean one of two things:
Under option 1, the “temp” is a regular W-2 employee of yours, probably employed at will like your other employees, but whether you call that person “temp” or “permanent” or “regular” or “irregular” (?), none of it matters. A temp worker who is your employee, paid subject to deductions, is your employee. Temp time counts toward FMLA eligibility. Continue reading
Among James Bond films, Rotten Tomatoes ranks Never Say Never Again 18th out of 26, with a mediocre 63% rating. (Bond movie quiz at the end of this post, for patient readers.)
It’s a cliche saying, I know, but my first reaction when asked this question was, “I’d never say never, but it’s hard to imagine a scenario where that would work.” (That was also my second reaction and my third. Let’s just say that’s my reaction.)
Let’s run this through the gauntlet. Remember, it’s not your choice whether an intern is an independent contractor or an employee. The law decides that for you, based on the nature of the relationship.
Test #1: Economic Realities Test. Under federal wage and hour laws, an independent Continue reading
ADA Quick Quiz: Your company uses staffing agency workers. A staffing agency worker discloses a medical need and asks for a reasonable accommodation — maybe a computer screen reading program, or an ergonomic chair, or a modified work schedule.
1. Which company must have the interactive conversation to determine what reasonable accommodation is appropriate?
(A) Your company
(B) The staffing agency
(C) Both
2. Which company is obligated to provide the reasonable accommodation?
(A) Your company
(B) The staffing agency
(C) Both
3. Which company is obligated today for the reasonable accommodation?
(A) Your company
(B) The staffing agency
(C) Both
Answers: Continue reading
Photo of Singer Dave Mason (We Just Disagree), by Alan Hurtock
Let’s start with this: Everyone is happy being an independent contractor until they’re not.
What do I mean by that? Right now, the relationship works. The contractor performs, and you pay for the work.
But what happens when things go south? As soon as you decide you no longer need those services, the contractor might stop being your BFF.
A disgruntled former contractor has some options, all of which involve some variation of this story: “Once upon a time, I was misclassified and should have been an employee.” None of the former contractor’s possible next steps are good for you: Continue reading
Retaining control over how independent contractors do their work can sink an otherwise legitimate independent contractor relationship.
Fortunately, steps can almost always be taken to give up aspects of control that do not hurt the business case for using a contractor instead of an employee. Companies need to be thoughtful and proactive, though, in evaluating and modifying these relationships — before they are challenged in a misclassification claim.
Here are four aspects of control you may be able to relinquish in your relationships with independent contractors: Continue reading
Who Is My Employee? 