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Understanding the employer-independent contractor relationship

On Behalf of | Mar 5, 2021 | Employment Law

For New York employers who fail to pay attention to proper employee classification, legal issues may arise. This is true if there are disputes over wages, benefits, there are injuries, dismissals or a contractor commits an act that would leave the employer liable if he or she was technically an employee. It is important for companies that hire independent contractors to be aware of the classification that makes an independent contractor. When there are disagreements or problems, it is wise to consider the value of experienced legal advice.

When is an independent contractor defined as such?

The differences between an employee and an independent contractor are stark, but people need to be cognizant of how contractors remain categorized as independent. Independent contractors are their own entity meaning they are in business for themselves. Their services are not limited to one company that hires them, but they are available to the public in general. In addition, the independent contractor is not supervised, directed or under the control of a company that hires them.

Rather than specific laws being in place to define independent contractors, there are tests that will determine the relationship. An employer categorizing a worker as an independent contractor and the worker agreeing to it does not automatically mean that will be the relationship. Court decisions have been used to decide when a worker is an independent contractor. For there to be an employer-employee relationship, the employee must work full time, attend training or meetings, have permission to be absent, accept instruction on how to do the work, be regularly supervised and more. By contrast, the independent contractor handles his or her own business, makes schedules, risks profit or loss, and does not need permission for certain activities at risk of the job, among other hallmarks.

Defining the relationship is key to avoid problems

Employers should be cognizant of the law and adhere to established decisions to ensure that an independent contractor remains categorized in that way and employment litigation does not occur. Failure to do so could leave the employer confronted with paying for insurance, unemployment and other costs that it did not intend to pay and was under the impression it was not required to do. For help in these cases or simply to be protected, having legal guidance can be crucial.