Independent Contractor Case Study

887 Words 4 Pages
Employee Versus Independent Contractor

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
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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
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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

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