IngentaConnect Defining the Employee Status of Independent Contractors in the U....

Abstract:

The U.S. Department of Labor's Bureau of Labor Statistics estimates that there are more than 8 million independent contractors in the U.S. As independent contracting becomes more popular, understanding the legal issues involved in classifying employees becomes even more important. Currently, the laws regarding employee classification are ambiguous. Consequently, determining independent contractor status is confusing and dangerous for businesses that misclassify their workers because businesses may be at risk of losing large amounts of money in back taxes and employee compensation. Microsoft Corporation recently faced the consequences of such misclassification when it had to pay several contractors back wages and benefits because the courts found that these contractors were treated as employees rather than independent contractors. Technical communicators responsible for hiring independent contractors or who work as independent contractors need to understand the tests used by U.S. Common Law, the Fair Labor Standards Act, and the Internal Revenue Service to define employee status. A review of past court cases and the predictors used in the outcomes of those cases showed that the courts used common law criteria and the Internal Revenue Service's 20-factor test most often to determine employee status. In addition, the review of these cases showed that certain factors exerted more influence than others on the outcomes of these cases. This article, therefore, recommends that knowing and understanding these predictors will allow technical communicators to protect themselves and the businesses they work for from costly litigation resulting from misclassification.

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Defining the Employee Status of Independent Contractors in the U.S.: A Review and Report on the Legal Issues for Technical Communicators