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Beware too much control over contractor! You could be liable for unemployment comp

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in Compensation and Benefits,Employment Law,Human Resources

You may think that a long-term arrangement with an independent contractor to provide professional services will never be considered an employment relationship. But that’s not true if you exert too much control over the way the work is done.

And according to a recent Commonwealth Court decision, it doesn’t take all that much control.

Recent case: Thomas Hartman was a freelance videographer who was free to accept or reject assignments from a video services company. At one point, he even turned down an offer to become the firm’s official employee.

But eventually, the company no longer needed his services—so he applied for unemployment compensation benefits. The service argued he was an independent contractor.

The court concluded otherwise. For unemployment compensation purposes, the burden is on the putative employer to show the individual claiming benefits is not an employee.

In this case, the service couldn’t meet that burden. Hartman was paid by the hour, even though he could turn down work. He was required to show up at a particular time, had to wear a uniform and didn’t have to bring his own equipment. That was enough for the court to conclude he was an employee. (Hartman v. Unemployment Compensation Board of Review, No. 1794 CD 2010, Commonwealth Court of Pa., 2012)

Final note: The law on independent contractors is complicated. Consult your attorney to ensure your contractor arrangements don’t accidentally create an employment relationship.

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