Legal minute with Cooley Shrair: Employee or Independent Contractor

SPRINGFIELD, Mass. (Mass Appeal) –  What’s the difference between an employee and an independent contractor? Attorney Robert Dambrov from the Law Offices of Cooley Shrair in Springfield shared more.

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What’s the difference between an employee and an independent contractor?
An employee is someone who performs services for an employer under the employer’s control or direction. An independent contractor is someone who performs services free from any control or direction. This means that, to be an independent contractor, the person performing the work decides how and when the work will be done. There are many factors that can be considered but the most important one is the amount of control the employer has not only on the result but also on how the work is to be done to get to the result.

Are there any benefits to an employer classifying someone as an independent contractor rather than an employee?
Yes. The employer can save money by not paying for things like Social Security and unemployment compensation taxes, workers compensation coverage, medical insurance, retirement plans, and overtime.

What if an employer is wrong in classifying someone as an independent contractor?
The employer could have to pay penalties and fines to the IRS and state tax authority for not taking mandated withholdings from the employee’s pay. If an employee was injured on the job and sued the employer, the law provides that, because the employer did not have workers compensation coverage, the employer is not entitled to the usual defenses, and the employee only has to prove that they suffered an injury that would have been covered if the employer had workers compensation coverage. The employee does not even have to show that the employer was negligent. If the employee incurred medical expenses that would have been covered by the employer’s medical insurance, the employer would have to reimburse the employee for all the expenses.

Can an employer decide itself whether someone is an employee or independent contractor?
No. Whether someone is an employee or an independent contractor is based upon all the various factors for each particular case. What someone is called, even a written contract in which the employer and the individual agree that they are an independent contractor, is the least important consideration. Moreover, Massachusetts has one of the strictest laws on this. That law provides that a person performing any service is deemed to be an employee unless 3 tests are all met. These are that

1. The individual must be free from control and direction in performing the service.

2. The service must be performed outside of the employer’s usual course of business, which means, for example, that a newspaper cannot get away with calling its newspaper carriers independent contractors.

3. The individual must be customarily engaged in an independent business, which means that the individual performs or offers the same service for others.

About Cooley Shrair:
Cooley, Shrair P.C., founded in 1946 by Judge Sidney M. Cooley and Attorney Edward B. Cooley, is a progressive law firm located in Springfield, MA. Cooley Shrair provides unequaled service to its clients. Our unparalleled response time to our clients’ needs is the foundation of our mission statement.

At Cooley Shrair, family and business have always had a way of blending together. We know the importance of balancing the boardroom and the courtroom with the living room from time to time. We listen carefully to understand our clients’ concerns and work vigorously with them to develop strategies for success. It’s not just business, it’s personal.

We pride ourselves in being the most responsive lawyers in the area, covering virtually every area of practice for individuals and multinational corporations across the United States and Canada. Cooley Shrair is recognized consistently for exceeding client expectations and providing competent, integrated, and cost-effective legal services.

Our attorneys are each distinguished in their respective areas of concentration and are complemented by a professional support staff. Cooley Shrair is a formidable opponent who fiercely advocates on behalf of our clients and we take pride in our commitment to provide unparalleled response and unparalleled solutions.

We’re a family, and to us, that’s very personal business.

Promotional consideration provided by Cooley Shrair.

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