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Employee or contractor? Ask who controls the work

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in Compensation and Benefits,Employee Benefits Program,Human Resources

Independent contractors aren’t eligible for unemployment compensation, and their clients don’t have to pay into the unemployment compensation trust fund.

Recent case: Benco Delivery Services contracts with truck owners to deliver packages in the Twin Cities area.

Drivers cover their own expenses, can refuse assignments and sign agreements specifying that they’re independent contractors. They can also work for other delivery service companies.

Yet when deliverymen sued for unemployment benefits, the Department of Employment and Economic Development (DEED) concluded they weren’t independent contractors. Benco appealed.

The court overturned the DEED decision because Benco showed that on almost every level, the drivers control major aspects of how they perform the work. Benco has very little control over their work. (Benco v. DEED, No. A09-942, Minnesota Court of Appeals, 2010)

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