Friday, July 12, 2013

Independent Contractor... or not?

Employers in many industries like to call their employees independent contractors.  Construction, sales, landscaping, computer services, law even.  The reason?  If someone is classified as a contractor, then there are no unemployment insurance bills to pay, no workers compensation contributions, no employer payroll contributions and no Social Security contributions.  The employer gets work done at a fraction of the cost of employing an employee and takes no responsibility for the lawful contributions to society that being an employer requires.

The rub is that the employer still wants to CONTROL the person they call a contractor.  Control is the essence of the employment relationship.  A contractor gets to work when he feels like it.  He has a job to do and he does it on his own time, subject of course to contract deadlines.  An employee has to work regular hours as determined by his employer.  A contractor often works for many employers.  An employee, not so much.  Employees usually work one job.  Sometimes two, but then generally in different fields.  Like working at IBM during the day and at a bowling alley at night.  Contractors bring their own tools to get their jobs done.  They bring in their own supplies and help.  Employees use their employer's tools, their employer's resources and their coworkers to get work done.  Employees are guaranteed minimum wages and overtime for weekly hours worked in excess of forty.  Contractors have no such protection.  They make as much or as little profit as they can squeeze out the contract price and they sure don't get Social Security contributions from the person for whom they perform work.

If you are offered a job and the employer says you will be classified as a contractor, at an employee like pay rate, then look long and hard at that employer and the offer.  Unless you intended to be a contractor, working on your own, without any support and for more than one employer, charging what you thought you should be paid, and without getting any payroll or Social Security contributions, then you might just want to clarify that relationship before accepting the position.  Or you could just charge a contract rate and come in late to work. 

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