Independent Contractor Case Study

Decent Essays
Employee Versus Independent Contractor
Introduction

To contract or not to contract workers, is the question. What is the real reason the IRS is conducting independent audits on companies who have independent contracted workers? The Equal Employment Opportunity Commission (EEOC) rules determines if the status of a worker is an employee or an independent contractor and in accordance to the common- law agency principles. The Department of Labor (DOL) audits organizations and violation of the discrimination laws result in organization’s needing to minimal legal risk that will result in state and federal employment laws compliance in properly classifying contingent workers. This paper will discuss the government’s interest in workers being properly
…show more content…
The case (Vizcaino vs. Microsoft Corp. ,1997) is to determines the classification of employees versus independent contractors and addresses the claim that since the workers are employees for tax purpose, they were entitled benefits (i.e. pension and stock-purchase plans).
Since the IRS reclassified many of the workers based on the DOL Guidelines, “if the status of a worker is an employee or an independent contractor and in accordance to the common- law agency principles”, then the worker is an employee and entitled to benefits from the company. Subject to Title VII of the Civil Rights Act of 1964, employers need to ensure proper classification of independent contractors, regardless of a signed contract agreement. Other Federal and State laws that govern the compliance of the DOL guidelines on the rights of employees: The NLRA, the Civil Rights Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act. Employers must withhold taxes for
…show more content…
Microsoft Corp (1997), employers believe that “the guidance is going to make it harder to classify workers as independent contractors” (Trottman, 2015), issuing workers benefits will avoid future economic issues. The augmentation will ensure that there is no discrimination, violation to the EEOC (Equal Employment Opportunity Commission), however, the definition of employees is vague and open for interpretation. The difference between employee and independent contractor worker is the “control”. If the worker is provided with tools, equipment and material by the company, if the hours and schedule are determined by the company, if the pay is provided by the company is responsible for training the worker to perform the task, the expectation is that this is any employee. Independent contractor worker utilizes their own tools, equipment and materials, the salary is paid by another company and the hours, schedule and task are issued by another company, therefore, would not be entitled to the benefits of that company. Independent contractor workers are unable to obtain unemployment insurance and not permitted to join a

Related Documents

  • Superior Essays

    Hence, the IRCA facilitates the power of employers over employees. The workers, on the other hand, are required to prove their legal status (should they change jobs) in order to be hired to work beyond the cutoff date (Chaves & Flores 152). The IRCA essentially leaves the workers, especially employees that are ineligible for legalization, in a vulnerable state employment situation that “may result in the already employed staying at their current place of work even under the most abject and exploitative of circumstances” (Chaves & Flores…

    • 1035 Words
    • 5 Pages
    Superior Essays
  • Great Essays

    The Americans with Disabilities Act The Americans with Disabilities Act was established in 1998, at the recommendation from the National Council of Disability. The Americans with Disabilities Act covers those with physical and mental disabilities. The Americans with disabilities Act is also known as ADA. The Act protects people with disabilities from discrimination in the workforce, and the workforce must provide reasonable accommodations for those with disabilities.…

    • 2411 Words
    • 10 Pages
    Great Essays
  • Improved Essays

    Task 310

    • 597 Words
    • 3 Pages

    LIT1 Task 310.1.5-02, 11, 13 Objective 310.1.5-02: Situation A. The Family and Medical Leave Act of 1993 does apply in this instance and the employer has not violated the act. Company X is a private sector business and has more than 50 employees, thereby being covered by the Family and Medical Leave Act of 1993.…

    • 597 Words
    • 3 Pages
    Improved Essays
  • Decent Essays

    Tyson Foods, Inc. v. Bouaphakeo I. Introduction a. I picked the Tyson Foods, Inc. v. Bouaphakeo case as my topic for my research paper. In this paper I will focus on the fundamental changes during the beginning to end of the case. I will also analyze the important facts that plaintiff and defendant used to testify during the trial. b, Peg Bouaphakeo and several former and current employees of Tyson Foods, Inc. sued the company's meat processing facilities in Storm Lake, Iowa.…

    • 282 Words
    • 2 Pages
    Decent Essays
  • Improved Essays

    Hrm/531 Week 1

    • 881 Words
    • 4 Pages

    Provisions of paragraphs one, seven, and eight are for employees by stipulating the roles the employees are expected to perform. Additionally, it gives wider insights on the responsibilities that are expected from employees. The provisions also provide key terms that should be followed in the contract. Question 4 The provisions of paragraphs two and four are intended to protect the confidential information of the company and its inventions.…

    • 881 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    It wasn’t like the workers were doing them a favor or something by being employed by the company. At first the government position was to decline involvement so it could not be seen as interfering. The business owners would have seen any attempt by the government to intercede as a violation of the privacy of the business…

    • 710 Words
    • 3 Pages
    Improved Essays
  • Great Essays

    In the following pages, I will provide one contract and six clauses for establishing effective communication strategies within my workplace. This document is primarily based on research by Birgitta Dresp-Langely (2009) regarding the ground clauses for ethical communication. In addition to the ethical contract, information throughout this proposal will incorporate clauses discussed in psychological contracts. In doing so, I aim cover all grounds necessary for effective interpersonal communication between managers and subordinates within my current organization.…

    • 1734 Words
    • 7 Pages
    Great Essays
  • Great Essays

    1.1ist the aspects of employment covered by law There are many aspects of employment which are covered by law. These include data protection act, confidentiality of employee information, wages, sick/holiday pay, health and safety and DBS. 1.2List the main features of current employment legislation There are a number of features of current employment legislation. From the main features are employment rights, equality and discrimination and health and safety.…

    • 1787 Words
    • 8 Pages
    Great Essays
  • Superior Essays

    Title VII of 1964 Civil Rights Act According to The American Association of University Women, Title VII of the Civil Rights Act of 1964 safeguards individuals against employment discrimination on the grounds of race and color, as well as national origin, sex, and religion. Title VII pertains to employers with fifteen or more employees, including state and local governments. It additionally pertains to employment organizations and to labor establishments, as well as to the federal government. (The American Association of University Women, 2016)…

    • 1096 Words
    • 5 Pages
    Superior Essays
  • Great Essays

    Garcia v. City of Antonio The issue on whether compensation and overtime pay is applicable to excluded and non-excluded security personnel is a major issue across various states. Even though the Fair Labor Standards Act provides direction regarding this issue, it remains to be a major concern that has attracted huge attention throughout various states. The U.S. Supreme Court and Congress have been forced to make several landmark decisions regarding whether compensation and overtime pay is relevant to exempt and nonexempt security workers.…

    • 1200 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    ARGUMENT I. THE PETITIONER, IN THIS CASE, WAS AN EMPLOYEE OF PLUS BUILDING, INC., AND NOT AN INDEPENDENT CONTRACTOR. Respondent claims that Petitioner Mr. Kroplewski was not an employee of Plus Building, Inc., but an independent contractor. Although there is no rigid rule of law to determine whether an employer-employee relationship exists between parties, such determination depends on the particular facts of the case. The range of factors is considered in making that determination including the right to control the manner in which the work is done, the method of payment, the right to discharge, the skill required, and who provided the materials, tools, and equipment.…

    • 888 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Sucha Partners Case

    • 1171 Words
    • 5 Pages

    Memorandum 1: On Advice to Sucha Tees: Standing and Probability of Success in Suit against BVD Partners, Bertie, TMI, and Vinnie (1) Sucha Tees v. BVD Partners, 2) Sucha Tees v. Bertie, 3) Sucha Tees v. TMI, 4) Sucha Tees v. Vinnie) I. Issue and Relevant Questions Sucha Tees seeks payment for $1000 spent on their custom t-shirts? Do all four defendants—Vinnie Pacciotto, Bertie Vastar, TMI, and BVD Partners—all assume liability for the payment? If so, how will payment be divided?…

    • 1171 Words
    • 5 Pages
    Great Essays
  • Improved Essays

    Peng, Chen MGMT 3720 Assignment #1 Walt Henderson is a draftsman in Wilson Construction Company. One day he was working on his personal project during company time and caught by his supervisor, Ken Hardy. Walt believes he has right to work on his personal project as long as he has completed all his work. However, Ken doesn’t agree with that because he believes workers are not allowed to do their personal project during company time based on the company rules. Then they had an argument about working at home and while on the company time.…

    • 729 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    As one who has been an external consultant in the past, experience would say that internal consultant 's would be able to make a better impact on a company then external consultants. An internal consultant may have limited perceptions and may be a part of the company already. They may add a different approach to how something is done because they have seen it done in the past and have applied the techniques themselves. They are also expected to have an in-depth knowledge on what the company needs to better its position in their industry. They are hired at a lesser rate than outside consultants.…

    • 1148 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    Moonlighting Case Study

    • 1038 Words
    • 5 Pages

    They are left wondering what they can help to ensure that they are getting the best from their employees as the primary employer. This presents a significantly tricky situation for both the employers and the employees. The issue of moonlighting also gives rise to various ethical concerns in the workplace ranging…

    • 1038 Words
    • 5 Pages
    Superior Essays