Comments on: Employee or Independant Contractor? http://www.4laborlaw.com/employee-or-independant-contractor/ Employment Law by Charles J. Cochran, Jr., Esq. Wed, 21 Sep 2011 01:13:26 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Charles J. Cochran, Jr. http://www.4laborlaw.com/employee-or-independant-contractor/comment-page-1/#comment-4014 Charles J. Cochran, Jr. Thu, 11 Aug 2011 15:33:19 +0000 http://www.cjcochran.net/?p=130#comment-4014 Craig: The question you pose is not one subject to an easy response, even such a general one as follows, as these matters are all very fact driven. That said, the Independent Contrator (IC) classification of workers has become one that the IRS has even more scrutinized as time progresses. At one point in time the IRS checklist was a helpful aid to help suggest IC/Employee status for other entities but it, in itself, might not be the final determiner. You might keep in mind that one part, and there are other others, of the reason the employer uses the IC classification is to limit their obligation for paying premium, or other obligation, relating to Workers Compensation. This is not necessarily a bad thing as many IC's are already paying for their own Workers Compensation Insurance and the absence of the additional expense associated with an employee, vice IC, might serve to make for a more compeititive payment for work performed. If you are injured you might have, looking only at Workers Compensation, an argument that you are an employee of that employer instead of an IC. Of course this "might" depends upon a lot of things I will not comment upon due to the general nature of this blog. Because of the wide and substantialy severe, for the employer, impact of such a determination you may well face an employer willing to expend substantial effort in opposing any claim by you to be an employee. If you are viewed as an IC in any later determination then, absent your separate application and approval for your own personal Workers Compensation coverage and payment of premium, you are left in a potentially poor postion in respect to your participation in the Workers Compensation Program. If injured you may find yourself not only limited in what you can do physically but financially. This would probably not be the best time to find out if you are covered by any employer's workers compensation policy. It just concerns me to leave such a potentially life changing benefit as workers compensation coverage subject to a later determination. If adverse, this determination could not only impact your ability to obtain medical treatment but also to obtain even the wage support type benefits of Temporary Total or other important benefits which might be available under the Workers Compensation Fund if you had been deemed an employee or carried you own Workers Compensation Policy. I am not advising you in this matter and certainly do not represent you, and this blog was not put in place to give any type of advice or provide information that people should base their decisions upon, but rather, to make general comments/observations and sometimes raise a question in peoples minds to make them inquire more fully. If your circumstances give you concern you may wish to obtain the advice of competent legal counsel prior to the time you find yourself in need of a clearer determination. Craig: The question you pose is not one subject to an easy response, even such a general one as follows, as these matters are all very fact driven. That said, the Independent Contrator (IC) classification of workers has become one that the IRS has even more scrutinized as time progresses. At one point in time the IRS checklist was a helpful aid to help suggest IC/Employee status for other entities but it, in itself, might not be the final determiner. You might keep in mind that one part, and there are other others, of the reason the employer uses the IC classification is to limit their obligation for paying premium, or other obligation, relating to Workers Compensation. This is not necessarily a bad thing as many IC’s are already paying for their own Workers Compensation Insurance and the absence of the additional expense associated with an employee, vice IC, might serve to make for a more compeititive payment for work performed. If you are injured you might have, looking only at Workers Compensation, an argument that you are an employee of that employer instead of an IC. Of course this “might” depends upon a lot of things I will not comment upon due to the general nature of this blog. Because of the wide and substantialy severe, for the employer, impact of such a determination you may well face an employer willing to expend substantial effort in opposing any claim by you to be an employee. If you are viewed as an IC in any later determination then, absent your separate application and approval for your own personal Workers Compensation coverage and payment of premium, you are left in a potentially poor postion in respect to your participation in the Workers Compensation Program. If injured you may find yourself not only limited in what you can do physically but financially. This would probably not be the best time to find out if you are covered by any employer’s workers compensation policy. It just concerns me to leave such a potentially life changing benefit as workers compensation coverage subject to a later determination. If adverse, this determination could not only impact your ability to obtain medical treatment but also to obtain even the wage support type benefits of Temporary Total or other important benefits which might be available under the Workers Compensation Fund if you had been deemed an employee or carried you own Workers Compensation Policy. I am not advising you in this matter and certainly do not represent you, and this blog was not put in place to give any type of advice or provide information that people should base their decisions upon, but rather, to make general comments/observations and sometimes raise a question in peoples minds to make them inquire more fully. If your circumstances give you concern you may wish to obtain the advice of competent legal counsel prior to the time you find yourself in need of a clearer determination.

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]]> By: Craig Saunders http://www.4laborlaw.com/employee-or-independant-contractor/comment-page-1/#comment-4005 Craig Saunders Sat, 06 Aug 2011 16:30:07 +0000 http://www.cjcochran.net/?p=130#comment-4005 My question is i resentlly got hired by a trucking company in ohio as a independent contract driver he supplying the truck, paying for fuel ,e.t.c will i still be recognized as a employee and what should i look out for my # 513-828-9377 My question is i resentlly got hired by a trucking company in ohio as a independent contract driver he supplying the truck, paying for fuel ,e.t.c will i still be recognized as a employee and what should i look out for my # 513-828-9377

]]> By: Charles J. Cochran, Jr. http://www.4laborlaw.com/employee-or-independant-contractor/comment-page-1/#comment-3658 Charles J. Cochran, Jr. Thu, 11 Mar 2010 16:18:49 +0000 http://www.cjcochran.net/?p=130#comment-3658 Kris: From recent activity in the news it looks like the government will be looking closer at these classifications in the future. President Obama has stated that a substantial sum of money is being earmarked just to find and remedy misclassified Independent Contractors. Senator Kerry has proposed legislation that will put stronger impetus on Employers to properly classify their workers. While the driver for this closer review seems to be lost tax revenue I suppose that whatever the reason our country will be seeing a change in enforcement of the proper classification of workers. The upside to having tax revenue as a reason for tightening up classification is there is a need for the increased revenue and there should be a benefit in enforcement so this process will be a serious effort by government. Whether stronger enforcement will benefit workers still remains to be seen because of the ripple effect of any change. As you indicated "outsourcing" is becoming, or has become, a significant consideration for Employers. With this new government direction of increased enforcement and stricter review of the proper classification of workers outsourcing may become even more viable with employers where the type of employment permits it. If this policy can be implemented without being particularly over reaching then this could be a positive result. However, if enforcement eliminates the Independent Contractor classification except in absolutely clear circumstances then the impact could be very undesirable. I am in the process of reviewing this scenario for a new business right now and the current climate regarding classification is of great concern. Those employers who have classified their employees as independent contractors should all go back and review this determination again because the stakes in misclassification could be going up. I have yet to review Senator Kerry's proposed legislation but if penalties and other costs involved with misclassification increase and defenses to misclassification become less available then employer review should happen sooner rather than later. Those employers who have made a decision to classify their workers as Independent Contractors on border line distinctions cannot simply act like business is usual. Let us hope that the question of "fairness" and greater clarity in the rules used to make the classification can be legislated into this matter and if not that enforcement will at least have some flexibility. The practical impact of stricter enforcment will be increased employer costs which will probably be passed on to the consumer to some extent, as well as, impacting income to the employee. I really hope that this new attitude will produce a "win-win" situation for all but only time will tell. Kris: From recent activity in the news it looks like the government will be looking closer at these classifications in the future. President Obama has stated that a substantial sum of money is being earmarked just to find and remedy misclassified Independent Contractors. Senator Kerry has proposed legislation that will put stronger impetus on Employers to properly classify their workers. While the driver for this closer review seems to be lost tax revenue I suppose that whatever the reason our country will be seeing a change in enforcement of the proper classification of workers. The upside to having tax revenue as a reason for tightening up classification is there is a need for the increased revenue and there should be a benefit in enforcement so this process will be a serious effort by government. Whether stronger enforcement will benefit workers still remains to be seen because of the ripple effect of any change. As you indicated “outsourcing” is becoming, or has become, a significant consideration for Employers. With this new government direction of increased enforcement and stricter review of the proper classification of workers outsourcing may become even more viable with employers where the type of employment permits it. If this policy can be implemented without being particularly over reaching then this could be a positive result. However, if enforcement eliminates the Independent Contractor classification except in absolutely clear circumstances then the impact could be very undesirable. I am in the process of reviewing this scenario for a new business right now and the current climate regarding classification is of great concern. Those employers who have classified their employees as independent contractors should all go back and review this determination again because the stakes in misclassification could be going up. I have yet to review Senator Kerry’s proposed legislation but if penalties and other costs involved with misclassification increase and defenses to misclassification become less available then employer review should happen sooner rather than later. Those employers who have made a decision to classify their workers as Independent Contractors on border line distinctions cannot simply act like business is usual. Let us hope that the question of “fairness” and greater clarity in the rules used to make the classification can be legislated into this matter and if not that enforcement will at least have some flexibility. The practical impact of stricter enforcment will be increased employer costs which will probably be passed on to the consumer to some extent, as well as, impacting income to the employee. I really hope that this new attitude will produce a “win-win” situation for all but only time will tell.

]]> By: KrisBall http://www.4laborlaw.com/employee-or-independant-contractor/comment-page-1/#comment-3657 KrisBall Wed, 10 Mar 2010 09:01:01 +0000 http://www.cjcochran.net/?p=130#comment-3657 The way I see it companies are getting into the bigger picture of the outsourcing field especially now that global online resources are available. It is such a sad note that companies would only think of in terms of what strategy gives them the better edge. I totally agree with the author that instead of focusing on the classification, the government can actually do a better job of making it a win-win situation for both sides. Otherwise, we might see a spiking unemployment rate in the years to come. The way I see it companies are getting into the bigger picture of the outsourcing field especially now that global online resources are available. It is such a sad note that companies would only think of in terms of what strategy gives them the better edge. I totally agree with the author that instead of focusing on the classification, the government can actually do a better job of making it a win-win situation for both sides. Otherwise, we might see a spiking unemployment rate in the years to come.

]]> By: Chuck Cochran http://www.4laborlaw.com/employee-or-independant-contractor/comment-page-1/#comment-65 Chuck Cochran Mon, 09 Mar 2009 00:49:40 +0000 http://www.cjcochran.net/?p=130#comment-65 I received an interesting E-Mail from George which addressed this post and thought I would bring a portion of it back into these comments. Please note that anyone who sends me an E-Mail can rely upon my discretion in not giving out any of their private information. Thank you for the E-Mail which you sent me. I brought a portion of your discussion back to the Comments section of this posting because I think your observations are very relevant to the subject of this article. "Maybe someday the IRS and Congress will figure out that instead of treating it as a "misclassification" problem, they should focus on solutions that make the classification unimportant or less important. There should be -- from a free-market standpoint -- neutrality as to form of business relationship, which would encourage people to join forces in the most productive ways." George Owner-Editor of George's Employment Blawg www.employmentblawg.com I agree with you that one way to address the problem of mis-classification might be to look at limiting the actual impact of the legal distinction between being an Independent Contractor versus an Employee. My next posting in this series may develop this thought. I would appreciate the comments from other readers concerning these thoughts with a possible question for comment stated as: "From a legal perspective would it be practical to eliminate the distinction between Independent Contractors and Employees on at least some levels in the Employment context?" Certainly every discussion is defined by the questions which are asked to start it therefore if anyone wishes to suggest a new question please do not hesitate to provide it. In fact the more questions, observations and comments which are provided which home in on this concept the better. If it concerns you that your question might not appear directly related to the particular point we are discussing please remember that I had intended, from the outset, to write a series on the subject of Independent Contractor vs. Employee and your points raised might provide the direction for a future posting. I received an interesting E-Mail from George which addressed this post and thought I would bring a portion of it back into these comments. Please note that anyone who sends me an E-Mail can rely upon my discretion in not giving out any of their private information.

Thank you for the E-Mail which you sent me. I brought a portion of your discussion back to the Comments section of this posting because I think your observations are very relevant to the subject of this article.

“Maybe someday the IRS and Congress will figure out that instead of treating it as a “misclassification” problem, they should focus on solutions that make the classification unimportant or less important. There should be — from a free-market standpoint — neutrality as to form of business relationship, which would encourage people to join forces in the most productive ways.” George Owner-Editor of George’s Employment Blawg
http://www.employmentblawg.com

I agree with you that one way to address the problem of mis-classification might be to look at limiting the actual impact of the legal distinction between being an Independent Contractor versus an Employee. My next posting in this series may develop this thought. I would appreciate the comments from other readers concerning these thoughts with a possible question for comment stated as: “From a legal perspective would it be practical to eliminate the distinction between Independent Contractors and Employees on at least some levels in the Employment context?” Certainly every discussion is defined by the questions which are asked to start it therefore if anyone wishes to suggest a new question please do not hesitate to provide it. In fact the more questions, observations and comments which are provided which home in on this concept the better. If it concerns you that your question might not appear directly related to the particular point we are discussing please remember that I had intended, from the outset, to write a series on the subject of Independent Contractor vs. Employee and your points raised might provide the direction for a future posting.

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