New Jersey courts have considered the following factors in deciding whether the employee was an independent contractor or an employee (the list is not exhaustive):
1. Review type of payments, W2, 1099’s, or cash;
2. Review payroll records for the worker;
3. Read any contracts between the companies involved, including indemnification cause, which may render the independent contractor defense moot;
4. Investigate any pending IRS issues pertaining to the worker’s status;
5. Determine who supplied the tools and equipment if in the construction field;
6. Check the method of transportation of the worker to the job site;
7. Investigate whether there are other sources of income or whether the putative employer is the only source of income;
8. Determine …show more content…
v. Wausau Ins. Companies, the Supreme Court of New Jersey thoroughly analyzed the question of independent contractor status. Re/Max argued that the real estate agents were independent contractors. The real estate agents had contracts that stated they were independent contractors, choose their own working hours, had their own vehicles and marketing budgets, and retained the full amount of the commissions. Id, 162 N.J. 282, 285 (2000). The Supreme Court found that agents to be employees because they were economically dependent on Re/Max based on the administrative support provided by Re/Max and the agents’ commission was based on a New Jersey statute. Id, at 286. Further, the work performed by the employees was an integral part of the business. Id. The Supreme Court was highly critical of Re/Max concluding “that the innovative structure created by the Re/Max agreement is simply another sophisticated attempt to thwart the employer-employee relationship.” Id, at 288. Thus, Supreme Court held that: (1) the employees had to abide by guidelines and quality controls set by Re/Max to satisfy the control test, and (2) the employees were economically dependent and worked exclusively for Re/Max to satisfy the relative nature …show more content…
However, given the use and prevalence of relative nature test by New Jersey courts, it is safe to assume the court would continue its independent contractor defense analysis under the relative nature test.
The relative nature test is more difficult to satisfy because courts typically like to thoroughly examine each fact in the case. Here, the facts are limited. The employment was in the regular course of the business, but in a minor aspect. Further, the economic dependence can be troublesome because the facts are unclear and it is unlikely that he has a legitimate economic dependence based on a single flat fee payment for services.
Based on the listed factors, a detailed inquiry is required on the following information: employment history (bullet point 2), who supplied the tools and equipment (bullet point 5), how Eric Avogardo arrived at work (bullet point 6), and whether Eric had other sources of income (bullet point 7 and
1. Review type of payments, W2, 1099’s, or cash;
2. Review payroll records for the worker;
3. Read any contracts between the companies involved, including indemnification cause, which may render the independent contractor defense moot;
4. Investigate any pending IRS issues pertaining to the worker’s status;
5. Determine who supplied the tools and equipment if in the construction field;
6. Check the method of transportation of the worker to the job site;
7. Investigate whether there are other sources of income or whether the putative employer is the only source of income;
8. Determine …show more content…
v. Wausau Ins. Companies, the Supreme Court of New Jersey thoroughly analyzed the question of independent contractor status. Re/Max argued that the real estate agents were independent contractors. The real estate agents had contracts that stated they were independent contractors, choose their own working hours, had their own vehicles and marketing budgets, and retained the full amount of the commissions. Id, 162 N.J. 282, 285 (2000). The Supreme Court found that agents to be employees because they were economically dependent on Re/Max based on the administrative support provided by Re/Max and the agents’ commission was based on a New Jersey statute. Id, at 286. Further, the work performed by the employees was an integral part of the business. Id. The Supreme Court was highly critical of Re/Max concluding “that the innovative structure created by the Re/Max agreement is simply another sophisticated attempt to thwart the employer-employee relationship.” Id, at 288. Thus, Supreme Court held that: (1) the employees had to abide by guidelines and quality controls set by Re/Max to satisfy the control test, and (2) the employees were economically dependent and worked exclusively for Re/Max to satisfy the relative nature …show more content…
However, given the use and prevalence of relative nature test by New Jersey courts, it is safe to assume the court would continue its independent contractor defense analysis under the relative nature test.
The relative nature test is more difficult to satisfy because courts typically like to thoroughly examine each fact in the case. Here, the facts are limited. The employment was in the regular course of the business, but in a minor aspect. Further, the economic dependence can be troublesome because the facts are unclear and it is unlikely that he has a legitimate economic dependence based on a single flat fee payment for services.
Based on the listed factors, a detailed inquiry is required on the following information: employment history (bullet point 2), who supplied the tools and equipment (bullet point 5), how Eric Avogardo arrived at work (bullet point 6), and whether Eric had other sources of income (bullet point 7 and