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Independent Contractors or Employees: The Importance of Correctly Classifying Workers in Florida

As the landscape of the modern employer-employee relationship changes, more and more people engage in non-traditional roles in the workplace. The Internet has allowed existing businesses to outsource tasks that were once performed in-house and has given workers more and more flexibility as to where and when they perform duties. As a result, the line between whether a worker is an employee or an independent contractor has become more blurred than it has been in the past.

The reason the distinction between employees and independent contractors is legally important is that certain federal and state laws create rights and responsibilities for parties who are in an employee-employer relationship. There is no bright-line rule used to make this determination, but rather a court will weigh a number of factors in order to classify a worker into one category or another. The factors[1] that are often considered by courts in making these determinations include:

  • The extent to which a particular workers’ duties are an integral part of the employer’s business.
  • The amount of control the employer exerts over the worker’s work. Some of the types of issues that may speak to the level of control an employer exerts include whether the employer or worker sets the schedule for when work will be performed or whether the worker or employer provides the tools or other equipment necessary to accomplish work to be completed.
  • The worker’s opportunities for profit and loss
  • The level of skill required in performing the task or tasks at issue and the level independent judgment that the worker exercises in performing a particular task
  • The permanency of the relationship
  • The amount investment made by the worker in facilities and equipment

For a worker seeking protections or attempting to assert rights under various labor laws, a court’s determination of their employment status may be crucial. As a result, it is important for workers who are in disputes regarding their classification to retain qualified legal counsel as soon as possible. An attorney familiar with litigating cases involving worker classification will be able to present your case in the best light possible. Some of the reasons that a business owner would attempt to classify an employee as an independent contractor are detailed below.

Tax liability – Federal law imposes certain tax responsibilities on employers in regard to their employees, including withholding federal income tax, social security, and Medicare, as well as paying Federal Unemployment Tax[2].  In addition, employers are also required to contribute to certain employee taxes. An employer may attempt to classify employees as independent contractors in an attempt to avoid the expenses associated with these taxes.

Labor laws – Federal laws also regulate certain issues in employment, including minimum wage[3] and overtime pay. These laws only apply to employees, however, so business owners may be tempted to classify workers as independent contractors to circumvent these laws. 

Unemployment benefits – Employees who lose their jobs through no fault of their own are generally eligible to receive unemployment benefits.[4]  When an employee successfully obtains unemployment benefits, however, it will raise their former employer’s unemployment tax liability. As a result, many employers contest unemployment benefit claims made by former employees. One of the ways in which a business owner could contest unemployment benefits is to argue that the individual seeking benefits was not an employee but was an independent contractor, instead.

Liability for the tortious conduct of employees – Generally speaking, employers are liable for the tortious conduct of their employees that occurs within the normal course of the employee’s job. For example, if a delivery driver negligently caused a motor vehicle accident while making a delivery, his or her employer could be held liable for any and all losses that victims incur. By classifying the driver as an independent contractor, however, the employer could potentially avoid legal liability for the accident, in which case the driver would be personally liable for any damages that occurred.

Contact a Clearwater employment law attorney today to schedule a free consultation

The mischaracterization of employees as independent contractors can have a significant impact on a worker’s legal rights. The determination as to whether a worker falls into one category or another often depends on a number of factors and often is a very close determination. Often, the assistance of an attorney who is familiar with the law regarding the classification of workers can have a significant impact on the outcome of a case. As a result, individuals who believe that their employment status has been mischaracterized and that that mischaracterization is affecting their legal rights should contact a Clearwater, Florida employment law attorney immediately. To schedule a free consultation with one of our attorneys, call the Dolman Law Group today at (727) 451-6900. 

Dolman Law Group
800 North Belcher Road
Clearwater, FL 33756
727-451-6900

https://www.dolmanlaw.com/legal-services/employment-law-attorneys/

References:

[1] http://www.dol.gov/elaws/esa/flsa/docs/contractors.asp
[2] http://www.irs.gov/Individuals/International-Taxpayers/Federal-Unemployment-Tax
[3] http://www.dol.gov/whd/minimumwage.htm
[4] http://www.dol.gov/dol/topic/unemployment-insurance/