Hiring Employees

4/30/2015

1

Employee Status

Objectives

• Employee vs. independent contractor

• Criteria for determining status

• Benefit to worker

• Impact on employer obligations

• Temporary workers

• Best practices

4/30/2015

2

Employee vs. Independent Contractor • Employment law often depends on

status of classification

• Employee: – Longer term commitment to employer

– Economic dependence on employer

– Supervised and controlled by employer

• Independent Contractor: – Maintains control over own work

– Offers services to other clients, not just employer

Criteria for Determining Status

• Control/supervision maintained by employer

• Service integration with employer's core business

• Permanence/duration of working relationship

• Vacation/leave given

• Intention of the parties

4/30/2015

3

Benefit to Worker

• Employee status gives certain legal protections and benefits (health insurance, retirement plan, etc.)

• Contractor status allows independence and quarterly self-employment taxes over payroll withholdings

Impact on Employer

• Employee status triggers employment law statutes (worker’s compensation, discrimination laws, etc.)

• Intellectual property

4/30/2015

4

Temporary Workers

• Temporary workers are likely an employee of a “temp agency”

• Circumstances could lead to finding that employer is sole or joint employer

Summary and Best Practices

• Independent contractor agreement

• Establish independent economic viability of contractor/worker

• Indemnification from temp agency

• No guarantees