Degree of control changes status from contractor to employee — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Degree of control changes status from contractor to employee

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in Compensation and Benefits,Discrimination and Harassment,HR Management,Human Resources

More and more courts are ignoring the labels companies and independent contractors put on their relationships—and even rewriting the relationship in some cases. That means that someone an organization has carried on the books as an independent contractor can be reclassified as an employee. Once that happens, the employer is on the hook for minimum wage, tax withholding and other responsibilities.

The key to the courts’ conclusions often lies in the kind and amount of control the company asserts over how the alleged contractor works. Simply put, the more control, the more likely the contractor is really an employee.

Recent case: Dr. Christopher Johnson, who is black and bisexual, worked as a contract physician at the Riverside Community Hospital. He performed plastic surgery and provided trauma consults in the hospital’s emergency room.

Although the written agreement specified that Johnson was a “contractor,” the hospital determined which shifts he worked and which nurses he would work with. The hospital even told him which credentials he had to put on the wall.

Johnson sued for discrimination under California’s Unruh Civil Rights Act, which entitles all persons to full and equal access to California businesses.

The 9th Circuit Court of Appeals sided with the hospital, simply because the Unruh law does not cover employment discrimination. However, even as it dismissed his case, the court observed that Johnson’s relationship “with Riverside was materially indistinguishable from that of an employee.” (Johnson v. Riverside Healthcare System, No. 06-55280, 9th Cir., 2008)

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