Works for only one employer. Has his work hours set by the one pay- ing him. Has his work location set by the one paying him. Uses his employer’s tools or materials. Why Does It Matter? Misclassification of an individual as an independent contractor may have a num- ber of costly legal consequences for em- ployers. If an employer is discovered to be paying individuals that the company classifies as independent contractors who meet the legal definition of an employee, they will likely be required to: Reimburse them for wages you should’ve paid them under the Fair Labor Standards Act, including over- time and minimum wage. Pay back taxes and penalties for federal and state income taxes, Social Security, Medicare and unemployment. Pay any misclassified injured employ- ees workers’ compensation benefits. Provide employee benefits, includ- ing health insurance, retirement, etc. In addition, the employer could be sub- ject to a civil lawsuit by the misclassified employee seeking civil damages. When It’s Complicated Even if a worker is an independent con- tractor under the common law rules, he or she may be considered “employees” by federal statute for certain employ- ment tax purposes if he or she works at home or at his own location on mate- rials that you supply and that must be returned to someone you specify, espe- cially if you also give them specifications for the work. Also, a full-time traveling or city sales- person who works on your behalf and turns in orders to you would generally be categorized as an employee by federal statute. Before hiring in either of these cases, or where there are other mixed indicators about whether the worker is an employee or contractor, consulting with a business attorney would be a wise proactive move. Roberts Attorneys, P.A. is located in Wash- ington, D.C., and Palm Beach Gardens, FL, and serves as general counsel for ALOA. The practice focuses on assisting business owners and business associations. Jeff can be reached at his Washington, D.C., office at (202) 609-7390; at (561) 360-2737 in Palm Beach Gardens, FL, or at Jeff@ RobertsAt- torneys.com. SAVE THE DATE! Reach New Heights at the 30th Convention and Trade Show 2016 May 16-20, 2016 ◆ Trade Show May 21, 2016 You asked — we listened. We’re back in Lexington for this value-filled event: ® Industry-leading classes taught by the best instructors ® Swap Meet and the Harry C. Miller Manipulation Contest ® Classes and Trade Show in one location ® $109 per night rooms with free parking and in-room WiFi at the Hilton Lexington/Downtown Want more information? Call (800) 532-2562 x240 or email [email protected]. SEE YOU IN LEXINGTON! WWW.ALOA.ORG OCTOBER 2015 KEYNOTES 51 Annual SAFETECH
