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Employment Law

Multiple complex laws govern when workers are considered employees, how they should be treated, how much they must be paid, and much more. An attorney can help ensure your business is compliant with the myriad of laws and administrative rules.

Our services include:

  • Worker classification
  • Wage and hour advising
  • Employee handbooks
  • DOLI compliance

Employees or Independent Contractors

How a business classifies workers is not the final determination about the workers’ status. If the Department of Labor audits a business, the provisions of the Fair Labor Standards Act are applied to the employer-worker relationship. Those provisions will be used to make a determination based on the total activity of the situation and how much the employer controls the workers' activities.

Among the factors which the Court has considered significant are:

  1. The extent to which the services rendered are an integral part of the principal's business. If they are, then the relationship looks more like that of an employer-employee.
  2. The permanency of the relationship. The more permanent and exclusive a relationship is, the more it looks like that of an employer-employee.
  3. The amount of the alleged contractor's investment in facilities and equipment. If the business provides the worker with the facilities and tools with which to do their work, it looks like an employer-employee relationship.
  4. The nature and degree of control by the principal. When a business controls the time, place and methods of the worker's work, it looks like an employer-employee relationship.
  5. The alleged contractor's opportunities for profit and loss. When a worker is paid on an hourly basis, and cannot gain a profit by working more efficiently, it looks like an employer-employee relationship.
  6. The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor. If a worker is allowed to hold themselves out as being “for hire” by others then they appear to be an independent contractor.
  7. The degree of independent business organization and operation. If a worker has a business entity such as a Limited Liability Company (LLC) or Corporation, and operates it independently of the company being audited, then he or she appears to be a legitimate independent contractor.

None of these factors alone proves a worker should be classified as an employee or independent contractor. A determination is made based on the relationship as a whole. It is often helpful to have the assistance of an attorney when looking at the relationship a company has with workers.

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