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Independent Contractors: Liability Issues

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in Compensation and Benefits,Discrimination and Harassment,FMLA Guidelines,Human Resources

When independent contractors are acting as a company’s agents, the company is liable for their actions, according to a U.S. Supreme Court ruling in 2003.

While this is a long-held common-law principle, the court’s decision actually protects individual owners of the company from liability arising from the actions of an independent contractor.

The case involved a charge of racial discrimination by a real estate agent in violation of the Fair Housing Act. The Supreme Court ruled that the agent and company could be sued, but not the officers or owners of a company in cases when the law specifically forbids individual suits against the owners. Meyer v. Holley et al., 537 U.S. 280 (2003)

Note: The Fair Housing Act doesn’t allow individual lawsuits or authorize personal liability for employees who violate the law. Be aware, however, that supervisors and managers can be sued individually under both the Family and Medical Leave Act and the Fair Labor Standards Act.

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