Edward Bush signed an independent contractor agreement with a company to do IT work. It allowed him to work for companies that didn’t compete with that company. When the assignment was over, he filed for unemployment compensation and was approved. The company that used his services appealed and won. The Pennsylvania court said he was ineligible because he set his own schedule and was free to work for other organizations if he wanted. (Resource Staffing v. Unemployment Compensation Review Board)
The lesson: If you use independent contractors, make sure they have the freedom to work for other clients and largely set their own schedules. Those criteria are important for determining whether someone is an “employee” and, thus, eligible for unemployment.
- Beware disciplining by withholding pay raises
- More reason to crack down on disability-related jokes and teasing
- Employee or independent contractor? For workers' comp, commission is last word
- Use managers to conduct some (Not all) reference checks
- Safeguard against failure-to-hire suits by explaining how hiring process works