Employers are fans of independent contractors, for some obvious reasons. The IRS and Department of Labor know this too. Don\'t get caught misclassifying your employees as contractors. Be smart and be wary.
My judgment against TempWorks Management, Inc. in a Minnesota court. It was an unfortunate, but necessary, process. The truth prevailed, as it usually does in these types of situations.
Changes on the Horizon: The DOL's Proposed Rules Regarding Independent Contra...Jim Cowan
This Presentation covers the DOL's new Proposed Rules. Topics covered include:
• The DOL Adopting more Restrictive Tests for Independent Contractor
• The Proposed Changes to DOL White Collar Exempt Status Regulations
• The Computer Professionals Exemption Decision Tree
• The Salary Basis Test, Permitted Salary Deductions
• The Exceptions from "No Pay-Docking" Rule
• Examples & Effects of Improper Deductions
• Payroll Practices that Do Not Violate the Salary Basis Test
• Additional Compensation.
DISCLAIMER:
By using this site and accessing the information presented by CowanPerry, PC., you understand that there is no attorney client relationship between you and CowanPerry, PC. The site and information contained therein should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
The information contained on this site is summary in nature and does not include all conditions, limitations, or exceptions that may be applicable to a particular situation. Every effort has been made to present current information without inaccuracies; however, errors, additions, deletions, and changes in the laws or procedures may occur and could make the information out of date or inaccurate. CowanPerry, PC does not assume any liability whatsoever for the "up-to-dateness", accuracy and completeness of the information.
White Paper: Complying With Regulations Regarding Temporary Workersss
The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
My judgment against TempWorks Management, Inc. in a Minnesota court. It was an unfortunate, but necessary, process. The truth prevailed, as it usually does in these types of situations.
Changes on the Horizon: The DOL's Proposed Rules Regarding Independent Contra...Jim Cowan
This Presentation covers the DOL's new Proposed Rules. Topics covered include:
• The DOL Adopting more Restrictive Tests for Independent Contractor
• The Proposed Changes to DOL White Collar Exempt Status Regulations
• The Computer Professionals Exemption Decision Tree
• The Salary Basis Test, Permitted Salary Deductions
• The Exceptions from "No Pay-Docking" Rule
• Examples & Effects of Improper Deductions
• Payroll Practices that Do Not Violate the Salary Basis Test
• Additional Compensation.
DISCLAIMER:
By using this site and accessing the information presented by CowanPerry, PC., you understand that there is no attorney client relationship between you and CowanPerry, PC. The site and information contained therein should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
The information contained on this site is summary in nature and does not include all conditions, limitations, or exceptions that may be applicable to a particular situation. Every effort has been made to present current information without inaccuracies; however, errors, additions, deletions, and changes in the laws or procedures may occur and could make the information out of date or inaccurate. CowanPerry, PC does not assume any liability whatsoever for the "up-to-dateness", accuracy and completeness of the information.
White Paper: Complying With Regulations Regarding Temporary Workersss
The use of temporary workers is growing in the United States, now representing 22% of the total workforce. Temporary workers are referred to as freelancers, non-employees, indirect workers, agency contractors, consultants, interns, independent contractors, and many other terms.
An employment law seminar presented by the attorneys at Palmer Kazanjian Wohl Hodson LLP in Sacramento, California. Date - May 29, 2014. Location - Cafeteria 15 L, 1116 15th Street, Sacramento, CA 95814.
Palmer Kazanjian’s attorneys advise and counsel management regarding all aspects of employment law. Our advisory practice includes assisting clients with compliance with all applicable employment laws and representation in matters involving a wide range of issues.
Palmer Kazanjian attorneys have extensive experience representing employers before state and federal courts, both trial and appellate. However, we also represent clients before government boards and commissions such as state and federal OSHA, the Equal Employment Opportunity Commission (“EEOC”), the California Fair Employment and Housing Commission (“FEHC”) and the California Department of Labor Standards Enforcement (“DLSE”) and the California Workers’ Compensation Appeals Board.
Our attorneys also provide a full range of dispute resolution and litigation services, including advice and counseling on how to avoid legal disputes. We recognize that favorable results are not enough if they are obtained in an uneconomical manner. The considerable experience of our litigators allows us to efficiently identify issues and generate responsive strategies. Palmer Kazanjian attorneys have handled matters in state and federal courts at the trial and appellate levels. We also appear before administrative agencies and private arbitration and mediation.
TOPICS
- Changes to rules regarding who is eligible for overtime and opportunities for compliance
- Chicago’s new family & sick leave law ordinance
- New EEOC guidance on reasonable accommodations and when leave must be provided
- Changes in joint employment standards that could make you liable for other companies’ actions
- New wellness program requirements
- The Defend Trade Secrets Act and new "magic language" for employee agreements
- EEOC pay reporting requirements
- and more…
The 2013 National Defense Authorization Act creates strong new protections for employees of federal contractors and subcontractors who “blow the whistle” on their own employers. The law encourages employees to report “gross mismanagement,” “gross waste,” “abuse of authority” and other misconduct related to federal contracts. Mark discusses these new protections.
If you're issuing a lot of Form1099s to people performing work for your company, take note: The Department of Labor (DOL) is aggressively challenging the status of many independent contractors who it believes are de facto employees. The distinction is crucial. Here's a look at a recent DOL "Administrator's Interpretation" on this matter.
Independent Contractors vs. Employees: Classification and CorrectionDeirdreJ6972
Employees, independent contractors....what's the difference? From the perspective of the government, everything. This is basic course on employee classification and correction.
This presentation explains the distinction between independent contractors and employees and advises employers how to avoid the costly errors of misclassifying employees as contractors.
An employment law seminar presented by the attorneys at Palmer Kazanjian Wohl Hodson LLP in Sacramento, California. Date - May 29, 2014. Location - Cafeteria 15 L, 1116 15th Street, Sacramento, CA 95814.
Palmer Kazanjian’s attorneys advise and counsel management regarding all aspects of employment law. Our advisory practice includes assisting clients with compliance with all applicable employment laws and representation in matters involving a wide range of issues.
Palmer Kazanjian attorneys have extensive experience representing employers before state and federal courts, both trial and appellate. However, we also represent clients before government boards and commissions such as state and federal OSHA, the Equal Employment Opportunity Commission (“EEOC”), the California Fair Employment and Housing Commission (“FEHC”) and the California Department of Labor Standards Enforcement (“DLSE”) and the California Workers’ Compensation Appeals Board.
Our attorneys also provide a full range of dispute resolution and litigation services, including advice and counseling on how to avoid legal disputes. We recognize that favorable results are not enough if they are obtained in an uneconomical manner. The considerable experience of our litigators allows us to efficiently identify issues and generate responsive strategies. Palmer Kazanjian attorneys have handled matters in state and federal courts at the trial and appellate levels. We also appear before administrative agencies and private arbitration and mediation.
TOPICS
- Changes to rules regarding who is eligible for overtime and opportunities for compliance
- Chicago’s new family & sick leave law ordinance
- New EEOC guidance on reasonable accommodations and when leave must be provided
- Changes in joint employment standards that could make you liable for other companies’ actions
- New wellness program requirements
- The Defend Trade Secrets Act and new "magic language" for employee agreements
- EEOC pay reporting requirements
- and more…
The 2013 National Defense Authorization Act creates strong new protections for employees of federal contractors and subcontractors who “blow the whistle” on their own employers. The law encourages employees to report “gross mismanagement,” “gross waste,” “abuse of authority” and other misconduct related to federal contracts. Mark discusses these new protections.
If you're issuing a lot of Form1099s to people performing work for your company, take note: The Department of Labor (DOL) is aggressively challenging the status of many independent contractors who it believes are de facto employees. The distinction is crucial. Here's a look at a recent DOL "Administrator's Interpretation" on this matter.
Independent Contractors vs. Employees: Classification and CorrectionDeirdreJ6972
Employees, independent contractors....what's the difference? From the perspective of the government, everything. This is basic course on employee classification and correction.
This presentation explains the distinction between independent contractors and employees and advises employers how to avoid the costly errors of misclassifying employees as contractors.
An individual who contracts with an entity to perform a service independent of the entity’s management and control is considered to be an Independent Contractor (IC)
Are your workers employees or independent contractors? Are you sure? Misclassification of an employee as an independent contractor could cost your company. If you deliberately misclassify, you could go to prison.
This presentation from the Taft Street Law Firm showcases the different totality of the circumstance common law control tests that the IRS, Department of Labor, and State of Florida use to determine whether a worker is an employee or an independent contractor.
If you are unsure whether you are following best business practices, contact a Virtual Corporate Counsel℠ at Taft Street.
http://toplawfirmflorida.com/florida-small-business-lawyer-virtual-corporate-counsel.html
The Ruby Files: The Case of the Disappearing Secrets and an Independent Contr...Polsinelli PC
In the fourth of our webinars on The Ruby Files: Managing the Challenging Employee, we continue to follow Ruby as her changing circumstances present her employers with a variety of legal complications.
Fresh off claims of sexual harassment and age discrimination at a bank, Ruby applies at a relatively new company in the technology industry, which is experiencing challenges relating to recruitment and employment. Ruby is hired as an independent contractor, but things don’t quite work out. She quits, and then claims constructive discharge because of her working conditions. After Ruby’s departure the company discovers that she has taken client lists and other proprietary materials on her way out the door. What is the company’s next move?
A Modern Look at Contractors v. EmployeesDiana Maier
Whether you’re a business owner concerned with making the right distinctions when engaging people to work with/for you, or a lawyer responsible for advising clients on the contractor v. employee distinction, this presentation could save you a lot of grief and money down the line.
Marin County-based employment lawyer Diana Maier and Carlos E. Torres, a Hearing Officer for the California Division of Labor Standards Enforcement (DLSE), discuss which factors matter most in deciding how to classify workers in light of recent legal decisions that are shifting those factors. In addition to covering a broad overview of the contractor v. employee debate, they also discuss ethical considerations for lawyers considering the question of contractor classification, and assess whether the sharing economy is due for extinction in light of recent rulings against companies such as Uber.
Keith SrakocicAssociated PressIssues in EmploymentUni.docxDIPESH30
Keith Srakocic/Associated Press
Issues in Employment
Unit VI
Chapter 21 Establishing the Employment Relationship
In this chapter you will:
• Identify the unique characteristics and liabilities of different categories of workers.
• Understand how respondeat superior and negligent hiring affect an employer’s
liability.
• Identify major legislation that governs employment–management relations.
sea80373_21_c21_287-306.indd 1 10/4/12 3:27 PM
Chapter 22 Introduction to Antidiscrimination Law
In this chapter you will:
• Understand the Commerce Clause and the Affectation Doctrine and the role of each
in enforcing antidiscrimination law.
• Understand the major components to a discrimination lawsuit, what each party
needs to prove, and their respective burdens of proof.
Chapter 23 Discrimination on the Basis of Race
In this chapter you will:
• Understand the application of Title VII to race discrimination and how it impacts
business.
• Identify steps that a manager can take to avoid race discrimination lawsuits.
Chapter 24 Discrimination on the Basis of Sex
In this chapter you will:
• Understand the application of Title VII to sex discrimination and how it impacts
business.
• Identify other key legislation related to discrimination based on sex.
Chapter 25 Sexual Harassment
In this chapter you will:
• Distinguish between different forms of sexual harassment.
• Understand what an employer’s liability is in sexual harassment cases.
Chapter 26 Other Types of Discrimination
In this chapter you will:
• Understand the application of Title VII to religious discrimination and how it
impacts business.
• Understand the application of Title VII to discrimination based on national origin
and how it impacts business.
• Understand the provisions of federal legislation that cover discrimination based on
disability and age.
• Identify examples of discrimination against nonprotected classes.
sea80373_21_c21_287-306.indd 2 10/4/12 3:27 PM
Establishing the
Employment Relationship 21
In thinking about setting up a business, you may have considered that all workers are classified as employees, but this is not true. There are, in fact, numerous forms that an employer–employee relationship can take or transform into. This chapter begins with those types of relationships and
examines the liability that can result from each. It will then look at some of the major labor law leg-
islation from the 20th century.
21.1 Employer–Employee Relationship
When an employer hires someone to work, the likelihood is that person will be categorized as an employee. Many students are unaware that the worker could actually be categorized in numerous ways: as an employee, an agent, or a servant. Some workers are not employ-
ees at all, but rather independent contractors (see Table 21.1). Each one of these types of workers
has unique characteristics and liabilities.
What makes someone an employee? It is well settled in law that employees ha ...
The issue of whether workers should be classified as employees or independent contractors for federal employment tax purposes has been a source of controversy for decades. The saga continues. This article summarizes a recent Tax Court decision on the classification of a manager in the home care industry.
Employees vs. Independent Contractors - James IrvingTrine Medina
James Irving presented on the differences of classifying an employee as an employee, independent contractor or intern and why it matters. He also provided guidance on what employers should to reduce the risks associated with misclassification.
20 Factor Test Employee Or Sub Contractordmaaskant
This document gives greater detail on the 20 Factors the IRS and other taxing agencies use during an audit. Much more clear than the IRS publication, but note - not published by the IRS.
Independent Contractors v. Employees-- How to Avoid Misclassification
1. Copyright 2011 (c) Deirdre Kamber Todd 1 Business Real Estate Land Use Commercial Litigation Bankruptcy Estate Planning & Taxation Healthcare Employment Family Law Independent Contractor versus Employee Status DEIRDRE KAMBER TODD, ESQUIRE, CHP DKamberTodd@FLBLaw.com 610.797.9000 ext. 383 9/12/2011
18. Copyright 2011 (c) Deirdre Kamber Todd 5 WHAT IS THE DIFFERENCE? Generally speaking, an employee is one who is hired to work under the direction and control of the employer An employee does not represent the employer An agent works under the direction and control of the hiring party (which for an agent is titled the principal). The key distinction between an employee and an agent is that the agent is hired with the power to represent the hiring party, the principal 9/12/2011
19. Copyright 2011 (c) Deirdre Kamber Todd 6 WHAT IS THE DIFFERENCE? Generally speaking, an employee is one who is hired to work under the direction and control of the employer An employee does not represent the employer An agent works under the direction and control of the hiring party (which for an agent is titled the principal). The key distinction between an employee and an agent is that the agent is hired with the power to represent the hiring party, the principal 9/12/2011
20. Copyright 2011 (c) Deirdre Kamber Todd 7 WHAT IS THE DIFFERENCE? An independent contractor is hired by an employer to perform a specific task. The key distinction between an independent contractor and either an employee or an agent is that the independent contractor performs the task according to the contractor’s own methods – the contractor is not controlled with respect to the job performance 9/12/2011
22. Copyright 2011 (c) Deirdre Kamber Todd 9 EMPLOYEE STATUS Classification of a hired party as an employee or agent (versus an independent contractor) will vary based on the law(s) involved and the relevant criteria 9/12/2011
23. Copyright 2011 (c) Deirdre Kamber Todd 10 IRS GENERALLY: Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job? Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.) Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business? 9/12/2011
24. Copyright 2011 (c) Deirdre Kamber Todd 11 IRS: 20 FACTORTEST Level of instruction. If the company directs when, where, and how work is done, this control indicates a possible employment relationship. Amount of training. Requesting workers to undergo company-provided training suggests an employment relationship since the company is directing the methods by which work is accomplished. Degree of business integration. Workers whose services are integrated into business operations or significantly affect business success are likely to be considered employees. Extent of personal services. Companies that insist on a particular person performing the work assert a degree of control that suggests an employment relationship. In contrast, independent contractors typically are free to assign work to anyone. 9/12/2011
25. Copyright 2011 (c) Deirdre Kamber Todd 12 IRS: 20 FACTORTEST Control of assistants. If a company hires, supervises, and pays a worker's assistants, this control indicates a possible employment relationship. If the worker retains control over hiring, supervising, and paying helpers, this arrangement suggests an independent contractor relationship. Continuity of relationship. A continuous relationship between a company and a worker indicates a possible employment relationship. However, an independent contractor arrangement can involve an ongoing relationship for multiple, sequential projects. Flexibility of schedule. People whose hours or days of work are dictated by a company are apt to qualify as its employees. Need for on-site services. Requiring someone to work on company premises—particularly if the work can be performed elsewhere—indicates a possible employment relationship. 9/12/2011
26. Copyright 2011 (c) Deirdre Kamber Todd 13 IRS: 20 FACTORTEST Sequence of work. If a company requires work to be performed in specific order or sequence, this control suggests an employment relationship. Requirements for reports. If a worker regularly must provide written or oral reports on the status of a project, this arrangement indicates a possible employment relationship. Method of payment. Hourly, weekly, or monthly pay schedules are characteristic of employment relationships, unless the payments simply are a convenient way of distributing a lump-sum fee. Payment on commission or project completion is more characteristic of independent contractor relationships. Payment of business or travel expenses. Independent contractors typically bear the cost of travel or business expenses, and most contractors set their fees high enough to cover these costs. Direct reimbursement of travel and other business costs by a company suggests an employment relationship. 9/12/2011
27. Copyright 2011 (c) Deirdre Kamber Todd 14 IRS: 20 FACTORTEST Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding. Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast, most employees rely on their employer to provide work facilities. Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees. Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors. 9/12/2011
28. Copyright 2011 (c) Deirdre Kamber Todd 15 IRS: 20 FACTORTEST Provision of tools and materials. Workers who perform most of their work using company-provided equipment, tools, and materials are more likely to be considered employees. Work largely done using independently obtained supplies or tools supports an independent contractor finding. Investment in facilities. Independent contractors typically invest in and maintain their own work facilities. In contrast, most employees rely on their employer to provide work facilities. Realization of profit or loss. Workers who receive predetermined earnings and have little chance to realize significant profit or loss through their work generally are employees. Work for multiple companies. People who simultaneously provide services for several unrelated companies are likely to qualify as independent contractors. 9/12/2011
29. Copyright 2011 (c) Deirdre Kamber Todd 16 IRS: 20 FACTORTEST Availability to public. If a worker regularly makes services available to the general public, this supports an independent contractor determination. Control over discharge. A company's unilateral right to discharge a worker suggests an employment relationship. In contrast, a company's ability to terminate independent contractor relationships generally depends on contract terms. Right of termination. Most employees unilaterally can terminate their work for a company without liability. Independent contractors cannot terminate services without liability, except as allowed under their contracts. 9/12/2011
30. Copyright 2011 (c) Deirdre Kamber Todd 17 IRS Businesses must weigh all these factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Also, factors which are relevant in one situation may not be relevant in another. http://www.irs.gov/businesses/small/article/0,,id=99921,00.html 9/12/2011
31. Copyright 2011 (c) Deirdre Kamber Todd 18 US DOL According to the DOL: 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. 9/12/2011
32. Copyright 2011 (c) Deirdre Kamber Todd 19 US DOL The factors that the Supreme Court has considered significant, although no single one is regarded as controlling are: The extent to which the worker's services are an integral part of the employer's business (examples: Does the worker play an integral role in the business by performing the primary type of work that the employer performs for his customers or clients? Does the worker perform a discrete job that is one part of the business' overall process of production? Does the worker supervise any of the company's employees?); The permanency of the relationship (example: How long has the worker worked for the same company?); The amount of the worker's investment in facilities and equipment (examples: Is the worker reimbursed for any purchases or materials, supplies, etc.? Does the worker use his or her own tools or equipment?); 9/12/2011
33. Copyright 2011 (c) Deirdre Kamber Todd 20 US DOL The nature and degree of control by the principal (Examples: who decides on what hours to be worked? Who is responsible for quality control? Does the worker work for any other company(s)? Who sets the pay rate?); The worker's opportunities for profit and loss (Examples: did the worker make any investments such as insurance or bonding? Can the worker earn a profit by performing the job more efficiently or exercising managerial skill or suffer a loss of capital investment?); and The level of skill required in performing the job and the amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent enterprise (Examples: does the worker perform routine tasks requiring little training? Does the worker advertise independently via yellow pages, business cards, etc.? Does the worker have a separate business site?). 9/12/2011
34. Copyright 2011 (c) Deirdre Kamber Todd 21 Services performed by a worker will be exempt under the benefit and taxing provisions of the UC Law if the individual is, in fact, an "independent contractor." In order to be excluded from coverage, the person who performs the services must meet two conditions pursuant to Section 4(l)(2)(B): The individual must be free from control or direction over the performance of the services involved, and The individual is customarily engaged in an independently established trade, occupation, profession or business. Only if both of these conditions are met to the satisfaction of the Department will the relationship be regarded as an "independent contractor." Unless and until those criteria are met, the services will be "employment" subject to the coverage of the UC Law. PA L&I (UC LAW) 9/12/2011
35. Copyright 2011 (c) Deirdre Kamber Todd 22 PA L&I The following items are not conclusive in determining "independent contractor" status: Employer designation, either verbally or in writing, that an individual is an "independent contractor"; Statement by an individual that they are an "independent contractor"; Issuance of a Federal Form 1099. A written agreement does not prohibit an examination of the facts to determine whether the performance of the services is subject to control or direction of the employer. If the examination shows either the exercise of or the right to exercise such control or direction, then the worker would be considered an employee and not an independent contractor. It is immaterial if the services are performed on a full-time, part-time or casual basis. 9/12/2011
36. Copyright 2011 (c) Deirdre Kamber Todd 23 PA L&I Issues surrounding "independent contractor" status normally arise out of random employer audits or unemployment claims filed by individuals who assert they were employees rather than "independent contractors." The Office of UC Tax Services randomly selects employers for audit to verify compliance with the UC Law. If issues arise concerning employee status such as those listed, an employer should have sufficient documentation to support the reasons for classifying an individual as an "independent contractor." The Department will use all available information to determine a worker’s status. 9/12/2011
37. Copyright 2011 (c) Deirdre Kamber Todd 24 PA L&I The presumption of the UC Law confers automatic employee status unless and until it is proven otherwise to the satisfaction of the Department. Examples of relevant documentation would include copies of the individual’s preprinted invoices, business forms and stationery, Federal and State tax ID numbers, business telephone directory listings, public advertisements soliciting business, Articles of Incorporation and leases on business properties. 9/12/2011
38. Copyright 2011 (c) Deirdre Kamber Todd 25 COMMON LAW EMPLOYEE STATUS Following are the factors affecting employee versus independent contractor status, found in Section 220 of the Restatement (Second) of Agency: (a) the extent of control which, by the agreement, the master may exercise over the details of the work (b) whether or not the one employed is engaged in a distinct occupation or business 9/12/2011
39. Copyright 2011 (c) Deirdre Kamber Todd 26 COMMON LAW EMPLOYEE STATUS (f) the length of time for which the person is employed (g) the method of payment, whether by the time or by the job (h) whether or not the work is a part of the regular business of the employer 9/12/2011
40. Copyright 2011 (c) Deirdre Kamber Todd 27 COMMON LAW EMPLOYEE STATUS (i) whether or not the parties believe they are creating the relation of master and servant, and (j) whether the principal is or is not in business 9/12/2011
43. Copyright 2011 (c) Deirdre Kamber Todd 30 RESPONDEAT SUPERIOR ARE YOU RESPONSIBLE FOR THE ACTIONS OF THE IC/EMPLOYEE? Respondeat superior is a legal doctrine providing for potential vicarious liability for an employer based on an employee’s (or agent’s) wrongs, for example, for an employee’s negligence or intentional torts An employer usually is not responsible for torts committed by independent contractors Under respondeat superior, an employer is only liable for employees or agents torts committed within the scope of the job 9/12/2011
44. Copyright 2011 (c) Deirdre Kamber Todd 31 RESPONDEAT SUPERIOR The test used in many states for whether an employee’s actions are within the scope of the employment requires assessing whether the individual is carrying out the object and purpose of the enterprise, as opposed to acting exclusively in his own interest 9/12/2011
45. Copyright 2011 (c) Deirdre Kamber Todd 32 NEGLIGENT HIRING Beyond respondeat superior, an employer may be liable for an employee’s torts based on the employer’s own negligence in the hiring, retaining, or supervising of the employee The plaintiff must prove the following elements in a negligence case Breach of a duty of due care Injury Causation 9/12/2011
46. Copyright 2011 (c) Deirdre Kamber Todd 33 NEGLIGENT HIRING: DUTY OF CARE A breach of due care involves failing to use the same care a reasonable person would have used under similar circumstances The law does not require perfection, just reasonable care In proving causation, the plaintiff must establish two causation components: Causation in fact – did the injury occur because of the defendant’s actions (failure to use due care)? Proximate causation – was the injury foreseeable (was the injury likely enough to happen that a reasonably prudent defendant would have behaved differently)? 9/12/2011
47. Copyright 2011 (c) Deirdre Kamber Todd 34 NEGLIGENT HIRING: DUTY OF CARE A lack of reasonable care in hiring by an employer may be found in the following examples: Failure to read a job applicant’s resume or job application Ignoring conflicting or overlapping dates on the resume or application Failure to inquire about gaps in dates on the resume or application Ignoring “red flags” such as previous firings; Failing to perform a background check on an applicant (AHH, does this include the internet?) 9/12/2011
49. Copyright 2011 (c) Deirdre Kamber Todd 36 OTHER ISSUES NON-COMPETITION ADVERTISING ON FACEBOOK (MORSE v. MER) CONTRACTS OPENING DOOR TO LARGER ISSUES BACK TAXES, WAGES, UC, WC, ETC. 9/12/2011
50. If your business uses independent contractors, get ready for new scrutiny. Hoping to boost tax revenue, the IRS and many state governments are cracking down on how companies classify their workers. When employers report wages for independent contractors on IRS form 1099, rather than a W-2, they aren't required to pay unemployment insurance, worker's compensation insurance or payroll taxes for them. But the rules governing which workers are genuinely "independent" are strict -- and often flouted. The Internal Revenue Service launched a program last month that will randomly examine 6,000 companies over the next three years for employee misclassifications. The federal government estimates it will raise $7 billion over the next 10 through tighter enforcement. 9/12/2011 Copyright 2011 (c) Deirdre Kamber Todd 37 http://money.cnn.com/2010/03/29/pf/taxes/employee_audit_crackdown.smb/index.htm