...is to decide if Karen is an independent contractor or an employee and discuss some of the preventative and ethical situations that are occurring in this case. Questions: 1. Do you feel that Karen is an independent contractor or an employee? What is your rationale for this decision? I believe that Karen is an independent contractor. She was never hired by ABC Utility as a permanent employee. Karen’s tittle was change twice; she had a tittle of a temporary employee and Human Resources Consultant. My rationale for my decision is based on the fact that Karen has been working for ABC Utility for the past five year as an independent contractor and has never received any benefits and was paid as a 1099. Karen was never in need for any kind of benefits prior to her husband's death. After Karen’s husband death, she finds herself in need to have benefits. 2. What factors do you feel help contribute to Karen being an employee? The factors that help are that she has been working fulltime for five years with the company and has developed a great rapport with fellow employees and other employees with hire positions such as managers. The Human Resource manager removed the word temporary out of her job title given her a permanent job title “Human Resources Consultant”. Having a solid working relationship with the human resource manager may also be leading others to view Karen as a permanent employee of ABC Utility. Having a contractor working on a daily basis for...
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...Employer-Employee Relations Employer-Employee Relations In the Little Lamb Scenario, individuals can see that Mary is her own boss and known as an independent contractor working of the Little Lamb Company and not one of their employees. In determining that Mary is not an employee, because Congress responded and stated that an employee is an individual who is “not classified as an independent contractor.” The National Labor Relations Act says, “The term employee shall not include any individual having a status of an independent contractor” however, it will not provide or give a definition of what constitutes independent contractors. The IRS says the following, “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done” (IRS Independent Contractor, 2013). An independent contractor is any individual who runs his or her own business. When hired by a company the company does not have to withhold federal, Social Security (FICA), state taxes or pay the individual unemployment. In Addition, the company does not have to pay the individual workers compensation insurance because the individual is an independent contractor. People know these individuals as consultants, freelance, self-employed, or business owners. If the company considered Mary an employee, she would have had to complete a trial period of employment before deemed as an integral part...
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...hired is an employee or an independent contractor. A major topic that reflects employee and independent contractor is employment-at-will. Independent contractors and employees are not the same. The characteristics of each affect the manner in which a variety of taxes are withheld and the legal consequences that may arise. Each employee will have a set amount of social security, medicare, federal, and states taxes withheld from his or her pay. This paper will distinctively explain the difference between employees and independent contractors and how employment-at-will exceptions can protect organizations. Employee and Independent Contractor The employees of Fast Tax Service, Incorporation are considered as employees. A common rule of an employee is anyone who performs services for a business and the employer has control what will be done and how it will be done (Kerch, 2012). Therefore, anyone who works for company and has to abide by final decisions made by the supervisor or employer is considered an employee. The following are requirements of an employee: o performs duties dictated or controlled by others o receives training for work to be done o works for only one employer (Small Business Administration (SBA), 2012). Employees have to report to the employer as long as he or she is on the clock. Employees have to rely on the employer to handle taxes and other related deductions from his or her pay. Consequently, independent contractors are the opposite...
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...1.0 INTRODUCTION In this 21st century the distinction between an employee and an independent contractor or self employed is difficult but an imperative one. An employee may be said to be an individual employed under a contract of employment and there is existence of employment relationship, while an independent contractor of self employed are persons entering a contact for service. For instance, if I require the services of a security guard from an outsourcing company, they security guard would be an employee of the outsourcing company and under a contract of service with the company. However I am at the option of hiring a fellow that is not employed to be my security guard, in this situation he is an independent contractor and he is providing a contract for service. Employment relationship exists between an employee and employer but not with independent contractor. The employer and the employee have certain relationship that is present between the employer and the independent contractor. The differences are as follows 2.0 EMPLOYMENT PROTECTION Termination of employment There are several ways by which contract of employment can be terminated by either the employee or employer which are. 2.1Termination by Notice Notice to terminate an employment contract can be given by both the employer and the employee provided the time is reasonable and the number of notice. (s.86) [ ] it also provides the minimum period of notice to be given by the...
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...individual is an employee or an independent contractor are: 1. Instructions. An employee must comply with instructions about when, where, and how to work. Even if no instructions are given, the control factor is present if the employer has the right to control how the work results are achieved. 2. Training. An employee may be trained to perform services in a particular manner. Independent contractors ordinarily use their own methods and receive no training from the purchasers of their services. 3. Integration. An employee's services are usually integrated into the business operations because the services are important to the success or continuation of the business. This shows that the employee is subject to direction and control. 4. Services rendered personally. An employee renders services personally. This shows that the employer is interested in the methods as well as the results. 5. Hiring assistants. An employee works for an employer who hires, supervises, and pays workers. An independent contractor can hire, supervise, and pay assistants under a contract that requires him or her to provide materials and labor and to be responsible only for the result. 6. Continuing relationship. An employee generally has a continuing relationship with an employer. A continuing relationship may exist even if work is performed at recurring although irregular intervals. 7. Set hours of work. An employee usually has set hours of work established by an employer. An independent contractor generally...
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...employer and employee is complex and involve numerous legal and ethical issues. It is imperative that employers be fully versed in the pertinent areas of employment law. The current issue is a prime example of this fact of life. Situation Review The company is involved in a legal dispute with a former contractor. The contractor was injured in route to a sales call in her personal vehicle and failed to attend the sales meeting. This resulted in the loss of the sale. Subsequently, the contractual relationship with the individual was terminated. The former contractor has sued the company alleging wrongful termination. Independent Contractor In Section 2 of the Restatement (Second) of Agency an independent contractor is defined as “a person who contracts with another to do something for him who is not controlled by the other nor subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.” (Cheeseman, 2007, p. 471). Labeling someone and independent contractor does not in make them one in fact. The degree of control the principal has over the agent determines the independent contractor status. In this case the salient issue is that the principal set the work hours and assignments for Beth. This indicates a high level of control and in general the courts have concluded that this is not an independent contractor. At-Will Doctrine Because the courts will probably designate Beth an employee and not a contractor the at-will...
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...Queensland University of technology | Employee-Contractor Case Study | By Monil Mehta | | Word Count: 1450 | 8/21/2014 | n8911941 | 1.0 Introduction The main purpose of this report is to distinguish and provide evidence to the fact that Anne Parish, a former employee at Ace Accident Insurance in Cairns was treated unfair by her former employer. In employment relations all employees should be treated and remunerated fairly, irrespective of them being an independent contractor or an employee (Fair Work Act, 2009). In this report it shall be determined whether Anne Parish was an employee or an independent contractor to Ace Insurance Co. using the multi-factor test. Further it shall also be argued upon whether Anne was dealt fairly or not. 2.0 The Multi- Factor Test The Multi- Factor test is important because it determines the entitlements for a worker as an independent contractor or an employee. The test started to be used by the legislature and federal courts from 1990’s to determine and decide upon, if an individual or group of individuals is an employee or a contractor (Stewart, 2009). The multi-factor test takes into account certain criteria’s and facts to determine whether a person is an Employee or Independent contractor . This facts fall into 3 main category namely behavioral control, financial control and type of relationship (Megerdomian, n.d). Behavioral...
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...IRS determined to issue the new rule related between employer and employee relationship. The rule was named Revenue Ruling 87 – 41 by IRS. Here are the 20 factors which guides to use to assess the likelihood as to whether an individual is an employee or an independent contractor. (1) Instructions. An employee must comply with instructions about when, where and how to work. The control factor is present if the employer has the right to require compliance with the instructions. (2) Training. An employee receives on-going training from, or at the direction of, the employer. Independent contractors use their own methods and receive no training from the purchasers of their services. (3) Integration. An employee’s services are integrated into the business operations because the services are important to the business. This shows that the worker is subject to direction and control of the employer. (4) Services rendered personally. If the services must be rendered personally, presumably the employer is interested in the methods used to accomplish the work as well as the end results. An employee often does not have the ability to assign their work to other employees, an independent contractor may assign the work to others. (5) Hiring, supervising and paying assistants. If an employer hires, supervises and pays assistants, the worker is generally categorized as an employee. An independent contractor hires, supervises and pays assistants under a contract that requires...
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...Employee or Independent Contractor? Responsible for Knowing Content of Links Highlighted in Yellow Key Issues 1. Why is the definition of “employee” so important? 2. How does an employer distinguish between an employee and an independent contractor? 3. Which key agencies have suggested criteria for determining if a worker is an employee or an independent contractor? 4. What is the most important factor in determining a worker’s classification? 5. What are the consequences of misclassifying an employee? 6. Various federal and state agencies have established standards for determining worker status. Below are there of the more important: a. IRS common law criteria b. Darden Factors c. FLSA criteria 7. How do the standards above overlap? 8. [pic]Cases Classifications of Workers – there are two general categories of workers: independent contractor or employee. Independent Contractor: (read to Section Form SS-8) Definitions vary based on specific regulations or laws. However, in general, the “payer” has the right to control or direct only the result of the work done by an independent contractor, not the means and methods of accomplishing the result. Misclassification is common and the consequences can be significant for an organization (payer). In most cases, a worker’s status is obvious, but can be complicated. Other Worker Terms Contingent or Temporary Workers: Worker’s job with an employer...
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...denied Karen's request. Karen's title, when she started, was Human Resources Temporary, but her new title evolved into Human Resources Consultant to be more consistent with others in the department who are doing work similar to hers. Karen does have a contract with the utility. Karen has had other limited clients over the years. She had one client for an approximately 40-hour project two years ago, and she currently has another client that keeps her on a retainer basis. Since she was denied benefits, Karen has contacted the IRS to ask them to determine her status. Your role/Assignment: Your role is to decide if Karen is an independent contractor or an employee and discuss some of the preventative and ethical situations that are occurring in this case. Questions: 1. Do you feel that Karen is an independent contractor or an employee? What is your rationale for this decision? According to the IRS “People such as doctors, dentists, veterinarians, lawyers, accountants,...
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...service MEANING OF EMPLOYEE TESTS Control Integration Fundamental or economic reality test Independence Intention APPLICATION OF LAW BEST PRACTICE CHART OF DIFFERENCES APPENDICES: IRD CHECKLISTS Appendix 1: Control test checklist Appendix 2: Integration test checklist AdviceLine For telephone advice and assistance, call or email the EMA AdviceLine and talk to one of our employer advisors: 09 367 0909 or 0800 800 362 AdviceLine@ema.co.nz Appendix 3: Independent test checklist Appendix 4: Intention test checklist Appendix 5: Economic reality test checklist Appendix 6: Employee Checklist 2 2 3 3 3 3 4 5 5 5 6 6 6 7 8 9 9 11 12 13 14 14 A-Z of Employing is available to EMA members only, via email, or online at www.emadvice.co.nz Contact AdviceLine to obtain your password. AdviceLine is open 8am – 8pm Monday to Friday (excluding public holidays) Contracts for Services OVERVIEW 1 2 3 A contract for service contrasts with a contract of service. An employee is a person under a contract of service and a contractor is a person who enters into a contract for service. The concern with the correct classification of a relationship is usually over whether a person has been prevented from accessing rights and protections available only to employees. The Employment Relations Act 2000 does not define a contract of service but defines the meaning of employee. The terms are interchangeable therefore the meaning of a contract of service is the meaning of employee as provided by the...
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...servant/employees in their work performance. Control becomes an important key to determine if a person is an employee as of today or to show if there is an employment relationship. There are differences between employees and independent contractors, an independent contractor is a person who agrees to deliver a certain outcome whereas an employee, who must obey instructions from his or her employer in the discharge of his duties, so independent contractor act independently from the principal that hires him.The independent contractor can delegate others to complete the job as the principal is not concerned with how the contractor does it, so long the outcome is achieved. Using control test from the common law, we can determine that Amanda is an employee of the company as the company control her working hours. We are concerned with the nature of the control and the degree of the control – Federal Commissioner of Taxation V J Walter Thompson (Aust) Pty Ltd (1994) Case. In Walter Thompson case, the company hired artists to perform radio plays for advertisements. The High court of Australia found that the producer controlled the actors during rehearsals and performance and held that there is an employment relationship here. Thus , we can use this case to prove that Amanda is an employee of the company. We can use the multi factor test to determine whether Amanda is the employee of the company. The multi factor test is the primary test used in Australia to identify a contract of employment...
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...Employment Law and Discrimination Paper Robert Truitt LAW/531 April 11, 2016 Richard Pacheco Employee Law and Discrimination Paper Discrimination happens in the workplace daily. All employees must report discrimination issues ASAP. This essay will analysis a scenario with an application of the elements of this cause of action and then move to the available defenses to the employee and employer while analyzing the potential civil liability of each possible party-defendant. Analyze each of the elements of this cause of action, the applicable defenses, and the basis for the Judge's ruling. As a result, the sufficiency of articulating a cause of action become crucial, especially when claims involving torts of cheating, deception, and trickery (Marino, 2005). Sex discrimination in the workplace presents one of the most significant problems for women in the twentieth century (McDonald, 1993). In this case, a male felt like he was getting sexual harass. The cause of action in the scenario was; the Plaintiff felt like he did not get a promotion due to the Defendant sending sexual videos to his email. The Plaintiff assumed that his boss saw the sexual email when his boss walked passed his cubicle. The Plaintiff did not have any evidence that his boss saw the video nor that the video was the cause of the Plaintiff not getting the promotion. In the workplace were the Plaintiff and the Defendant work sexual harassment and sexual jokes was the norm with their...
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...1.Do you feel that Karen is an independent contractor or an employee? What is your rationale for this decision? The differentiation between an independent contractor and an employee is a critical one for any employer to make. Furthermore, this choice can have significant implications for the business regarding additional fees and taxes. In this situation, Karen was initially hired as a temporary employee. Moreover, Karen has functioned as an independent contractor for 5 years. If one were to look at her employment status, they would see that Karen has additional clients outside of the local utility as well as the fact that she has not received benefits or proper tax documentation for this period time. For these reasons, Karen should be classified as an independent contractor for the local utility. 2.What factors do you feel help contribute to Karen being an employee? The IRS generally makes this determination. The IRS uses three characteristics to determine the relationship between businesses and workers, including the concept of behavioral control that covers facts that show whether the business has a right to direct or control how the work is done through instructions, training or other means. In addition, financial control covers facts that show whether the business has a right to direct or control the financial and business aspects of the worker's job. Lastly, the type of relationship factor relates to how the workers and the business owner perceive their relationship...
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...CONTEMPORY EMPLOYMENT RELATIONS EMPLOYEE-CONTRACTOR CASE Introduction: 148 There are a few different ways in which organisations can employ people. The two most common methods that businesses use are to employ people into the company as an employee or as a contractor. According to the IRS, under common-law rules, ‘anyone who performs services for an employer is an employee if the employer can control what will be done and how.’ On the other hand the IRS defines a contractor as ‘an individual is an independent contractor if the organization has the right to control or direct only the result of the work, not the means and methods of accomplishing the result.’ This case study will use the ‘multi factor test’ to explore and analyse the dilemmas identified in the case study. Precedent cases will be used to arrive at decision as to the employment relationship between Joseph Raphael (“the Plaintiff”) and Vincent Van Gallery (“the Defendant”). Body: 1100 Elements of a contract According to Lord Diplock in United Dominions Trust Ltd v Eagle Aircraft Services Ltd, “a bilateral contract is where each party undertakes to the other party to do or to refrain from doing something, and in the event of his failure to perform his undertaking; the law provides the other party with a remedy”. There are four main elements that create the backbone of a legally binding contract. The first requirement for a valid contract is an agreement, which consists of an 'offer' and an 'acceptance'...
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