Tag Archives: Tips

02.22.18
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Lessons From Cambodian Dancing Arrests: Don’t Draw Extra Attention to Your Independent Contractors

Tips for avoiding independent contractor misclassification claims

Screenshot from telegraph.co.uk

Ten European tourists face up to a year in Cambodian prison after being arrested for “pornographic dancing,” according to The Telegraph. Apparently, they went to a villa barbeque party and took pictures of themselves, clothed, dancing in suggestive poses.

Readers take notice: When barbequeing in Cambodia, do not draw unneeded attention to yourself by simulating sex positions and posting the pictures on social media.

When dealing with independent contractors, it’s also a good idea not to Continue reading →

02.05.18
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Is Your Independent Contractor Agreement Like an Emotional Support Peacock?

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Image from The Jet Set

My favorite news story from last week was United Airlines’ decision not to allow a woman to fly with her emotional support peacock. Peacocks are pretty, strutting their feathery stuff to attract the smokin’ hot peafowl ladies, but they’re not cuddly, and they don’t belong in the tight quarters of commercial aircraft.

I did my research here, and I can confirm they’re not even good house pets. According to an Information Leaflet published by the Wrexham County (U.K.) Borough Council, peafowl have not taken well to modern methods of human transport. The Leaflet warns potential peafowl pet owners, “Peafowl for some reason are fond of cars and enjoy standing on them. They will also attack their reflection in cars and cause damage by scratching and pecking them.” They also have a “very loud high-pitched meow like call.”

None of this sounds like what I want in a seatmate on a commuter flight out of Newark.

Anyway, the point here is that looking pretty isn’t enough. Continue reading →

01.18.18
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Should Businesses Reclassify Workers as Contractors for 2018? (Or, Why You Shouldn’t Paint Your Dog)

Independent contractortax plan - don’t paint your dog

The Republicans just threw a bone to independent contractors with their new tax law. What does that mean for businesses? Let’s examine.

Strategy question for businesses: Now that tax law provides more favorable tax treatment to independent contractors (see more here), should business reclassify workers as contractors for 2018?

If that’s your reason, then no.

Suppose a new law required ice cream shops to give free cones to dalmation owners. This would be a stupid law, but stay with me.

If I paint dots on a yellow lab, do I get free ice cream?

No, of course not. Even I call my yellow lab a dalmation, it’s still a lab.

Continue reading →

01.02.18
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School’s Back in Session: How Much Training Can You Give to Independent Contractors?

“We don’t need no education / We don’t need no thought control,” are the opening lines to Pink Floyd’s Another Brick in the Wall (Part II). “Teachers, leave them kids alone!”

The same advice can be given when retaining independent contractors. Contractors are supposed to be in business for themselves. They are expected to be competent in performing the types of activities they are being retained to perform. In several of the Independent Contractor vs. Employee tests applied to federal and state laws, the amount and type of training is a factor that can tilt the scales toward a finding of misclassification.

But sometimes, some training is needed. The key questions to ask yourself are, What type? And How much?

Continue reading →

12.07.17
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New Year’s Resolution: 5 Tips to Limit Risks of an Independent Contractor Misclassification Claim

new years resolutions independent contractor misclassification 2018You know deep down you’re not really going to run a triathlon or learn Mandarin in 2018, so how about a New Year’s Resolution that’s more realistic? Here are 5 things businesses can do to limit their risks of an independent contractor misclassification finding:

  1. Review and edit contracts. Independent Contractor Agreements should be customized for the specific retention, highlighting actual facts that would be helpful in opposing a challenge to independent contractor status.
  2. Review and modify facts. Almost every independent contractor relationship can be strengthened by finding ways you can give up control or memorialize ways that you do not ever intent to exercise control. Does it really matter what times of the day your contractor works? If you set hours and don’t need to, change that fact. Then memorialize it in the contract.
  3. Use a Vendor Qualification Questionnaire. Qualify your contractors before retaining them. Make them represent to you that they are really in business for themselves, have other clients, are not economically dependent on getting work from you, etc. These representations can be useful if the contractor — or the government — ever challenges the contractor’s classification by claiming the relationship is really employment.
  4. Assign a gatekeeper. You may have contractors that you don’t even know about because managers in parts of the business have retained outside help rather than ask permission to hire new employees. Create a process that requires managers to obtain permission from a particular person before retaining any outside labor.
  5. Be proactive. Examine the facts and circumstances of your independent contractor relationships now. Know where you stand on the risk scale. Then assess how you can make changes to better protect your business against a claim of independent contractor misclassification. There are almost always steps that can be taken proactively to limit your risks. Be ready.

Continue reading →

12.04.17
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Can You Pay a Bonus to Your Independent Contractors?

“I want my money!” — Pearl, in The Landlord.

If you haven’t seen this Will Ferrell short video from 1997, take a look. Pretty funny.

Everyone wants their money. Method of payment is one of many factors used to evaluate whether an independent contractor is properly classified or instead is an employee.

Payment by the hour is permitted, but this method of payment more closely resembles employment. Payment by the project, regardless of time spent working, is most appropriate for an independent contractor relationship.

Continue reading →

11.06.17
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Don’t Wear Pajamas to Work: Be Careful Using “Statutory Minimum” Workers Comp Clauses in Subcontractor Agreements

Pajamas - Independent Contractor Agreements and Workers Compensation ClausesHave you ever had the dream where you show up at work or school in your pajamas or underwear? You’re exposed and embarrassed in the dream, and you can’t figure out why you forgot to put on regular clothes, right? (Please don’t tell me I’m the only one who’s had this dream. Please?)

You may be living this dream inadvertently in your vendor or subcontractor agreements. (And this is not what people mean when they say, “I’m living the dream!”)

Here’s the problem:

Continue reading →

10.23.17
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Court Rules that New Jersey is a Goat (sort of): a Note on Forum Selection Clauses

goat independent contractor misclassification forum selection clause Mary Kay caseThe Monty Hall puzzle is a brain teaser based on the game show, Let’s Make a Deal. The contestant is presented with three doors and must choose one. Choose the correct door and win a car. Choose either of the wrong doors and win a goat. (Note to rural readers: The puzzle is a first-world conundrum and assumes you’d prefer the car.)

Once the contestant chooses, the host opens one of the doors with a goat and asks the contestant whether he wants to stay with his original choice or choose the other unopened door. As explained here, the contestant should always switch doors, since switching provides a 2/3 chance to win. The math here is not intuitive, but read about it and you’ll understand.

The gimmick relies on the fact that the host knows what’s behind each door and will only reveal a door that hides a goat. The host never reveals a car.

Continue reading →

10.19.17
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Beware of Sinkholes When Running Background Checks on Independent Contractors

Sinkholes are terrifying. One minute you’re slowly and cautiously riding along a city street. Then the road buckles and disappears. I feel bad for this guy in the video!

A similar danger may lurk for businesses who perform background checks on independent contractors. You proceed cautiously, following the various legal requirements, then – BAM! – someone claims that by following those requirements, you’re treating the contractor like an employee. Whaaaaat?

Background check laws are full of technicalities and traps for the unwary. For pre-employment background checks, the federal Fair Credit Reporting Act (FCRA) requires:

  • a stand-alone disclosure form, disclosing that a background check may be run,
  • consent, and
  • pre- and post-adverse action notices (if adverse action may be taken).

Continue reading →

10.16.17
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Why I Can’t Give You a Template Independent Contractor Agreement

Independent contractor vs employee template independent contractor agreement - generic independent contractor agreement - IMG_1112I am often asked for a sample Independent Contractor Agreement. I do a lot of work in this area, so I should have plenty, right? Well, sure, I have drafted dozens, but they won’t do you much good.

A generic Independent Contractor Agreement that includes a few boilerplate recitals is of little value. A generic agreement probably says something like, “We all agree that you’re an independent contractor and not an employee. We won’t pay employment taxes for you. We’re not paying into your Social Security account or providing you workers’ comp or unemployment coverage. We’re not giving you benefits. You’re lucky if we let you breathe the air in our building. No, you know what, bring your own oxygen tank. You can’t use our air. You agree to all of this and you’ll like it. And Thank you sir, may I have another?”

Continue reading →