Posted on July - 04 - 2010
Don’t Misclassify Employees As Independent Contractors
Please enjoy this guest post by Scott Callen and Jennifer Neumann from Foley & Lardner LLP
While classifying workers as independent contractors can result in substantial savings for an employer, the potential penalties for misclassifying a worker as an independent contractor can be significant. There are various legal standards, but the key factor in determining proper worker classification is the right to control the worker.
For an employee, an employer generally has the right to control both what the employee will do and how it will be done. However, no one factor alone usually proves or disproves a proper independent contractor classification. Companies must evaluate federal and state laws to properly classify a worker as an independent contractor and legal guidance is strongly recommended, but the examples below provide a basic primer on independent contractor classification.