Here’s some good news if you use truly independent contractors to perform work. If you have done it right, you don’t have to worry about losing an age discrimination lawsuit. But there’s a caveat: You must make sure you can easily prove your contractor wasn’t really an employee.
Compensation and Benefits
Compensation and benefits topics – whether it’s minimum wage, workers’ compensation laws, or employee pay – if properly handled, can help you retain workers and recruit new ones.
Use our advice to craft independent contractor agreements that keep independent contractors – and your bosses – happy.
Exotic dancers at the Penthouse Executive Club in New York City’s Hell’s Kitchen neighborhood are suing in Manhattan federal court, claiming their bosses have been raiding the tip box, pilfering money that rightfully belongs to the dancers. They allege the owners sometimes took so much money that some dancers’ pay fell below the minimum wage.
When it comes to employment lawsuits, HR is a lot like flying an airplane: The most risky parts of the trip are at the takeoff (hiring) and the landing (dismissal). With hiring, you can limit the employment-law risks by following the legally safe steps and training supervisors to do the same.
Employees can always sue if they haven’t been paid for their work—even if they’re in the country illegally and not eligible to work in the United States. Employers can’t use their undocumented status as an excuse for not paying minimum wage and overtime under the FLSA.
One more thing to worry about if you use independent contractors: If a contractor sues over unpaid wages and overtime, it’s unlikely a court will dismiss the lawsuit early.
Although the New Jersey Law Against Discrimination (LAD) primarily has been applied to sexual harassment claims involving employers and employees, a new decision by a New Jersey appellate court recognizes that the LAD can also apply to a refusal to engage in business transactions if it is based upon the refusal to comply with requests for sex.
As part of a wider crackdown on companies that violate worker protection laws, California Attorney General Edmund G. Brown Jr. filed a lawsuit alleging that a Los Angeles car wash, Auto Spa Express, failed to pay minimum wage and overtime to its employees and denied them workers’ compensation benefits.
Employers sometimes use independent contractors as a way to lower their benefits and other labor costs. But that kind of economizing can turn out to be quite expensive if a court decides that the independent contractor is really an employee. One of the deciding factors in such cases is how much independence a worker has to control his work. The greater the employer’s control, the greater the likelihood that the “independent contractor” is really an employee.