Companies that want a reliable workforce but don't want the expense and regulation inherent in an employer-employee relationship have been tuning in greater numbers to independent contractors. However, the status of a worker as an employee or independent contractor is not determined by the label slapped on the relationship by the employer or even the employer's chosen methods of compensation. The status is determined by how the parties actually interact. The greater the degree of control maintained by the hiring party of the methods and manner of the work performance, the more likely that the worker will be deemed by law to be an employee. This can be problematic for employers who want the payroll and regulatory flexibility of an independent contractor relationship but who also want to control the details of how and when the work is performed.
These issues should be front and center in the public view over the next couple of years as multiple lawsuits against FedEx Ground proceed through the system. Former workers are suing for overtime pay and employer payroll contributions that were not made for many years.
See related posts here and here.
Legal advice from the Zellmer Law Group: