From Lexology, Kerri S. Bruce, Mark S. Goldstein and Sarah T. Hansel of Reed Smith discuss whether your blogger is an employee or independent contractor. They provide a great background overview of the differences between an employee and independent contractor, and discuss the various tests including the economic realities test and the ABC test. Finally, they offer recommendations for protecting your company. They write:
we offer three tips to help companies continue to benefit from independent contractor engagements while minimizing the associated misclassification risks:
First, be realistic about the nature of your working relationships. Do not allow the benefits of independent contractor designation to cloud an honest evaluation of the propriety of such designation. In borderline cases, consider erring on the side of employee – rather than independent contractor – designation; doing so will often prove more beneficial in the long run, as the costs and inconvenience associated with defending a misclassification audit or lawsuit often will dwarf the short-term savings and other upsides of any independent contractor engagement.
Second, clearly communicate – in a writing signed by both parties – the mutual understanding as to an independent contractor’s non-employee status, spelling out clearly all that that entails (i.e., no rights to statutory and other benefits that are afforded to employees). As noted, although this type of contract will not be conclusive in the event of a challenge, it may provide helpful evidence in the event of litigation, and it may even dissuade the worker from pursuing a claim in the first place.
Third, if you have concern that any of your independent contractors has been misclassified, work with experienced counsel to help you evaluate immediately. Thereafter, you may be able to reclassify voluntarily without involvement by governmental agencies. Sometimes, depending on the level of perceived risk and the scope of perceived misclassification, you may decide to consider voluntary self-reporting to such agencies, especially to the IRS. Doing so could save you the expenses and other headaches of defending adversarial audits down the road.