From Inside Counsel, Joseph E. Gumina and Erica N. Reib discuss properly classifying workers as employees or independent contractors under the FLSA. In addition, they offer some recommendations to support the classification of a worker as an independent contractor. They write:
“Companies need to be proactive and regularly revisit and reassess their use and classification of independent contractors to avoid liability for misclassification. Employers who are truly using independent contractors need to observe the formalities and necessities of that relationship. Although an independent contractor agreement will not be determinative, it is a good place for employers to start to set expectations and shape the scope of the relationship. To strengthen your position relative to an independent contractor classification, you should also:
- Maintain separate files for independent contractors apart from employee personnel files;
- Not require independent contractors to wear company logos and insignia or require them to display company logos on equipment and vehicles;
- Permit independent contractors to work for other entities;
- Pay independent contractors upon submission of invoices, like all other vendors, and not pay them in a similar manner as you would pay your employees; and
- Not subject your independent contractors to the same work rules that you impose upon your employees.
Simply, companies that treat independent contractors like employees will find themselves in the DOL’s misclassification initiative crosshairs….”
Read the full story at Independent contractors—Avoiding misclassification under the FLSA.