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.
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