Tiny organizations often choose to address staff as independent contractors for any range of motives: avoiding the trouble of calculating and having to pay personnel withholdings escaping the employer’s essential costs for unemployment coverage, workers’ compensation, and other prices and, liberty from additional time and other wage and hour regulations. In limited, managing workers as “unbiased contractors” can exert a powerful attraction on a modest organization.
Like lots of other solid temptations, managing an personnel as an unbiased contractor can also direct specifically to hell if the employee is not a single. The litany of hellish outcomes, the two for an employer and for its responsible officers and equity proprietors, is sobering. Cities Our Team Cover Trusted Mediators UK Barnstaple
Very first there are the unpaid withholdings for which not only the employer but also its accountable officers and directors may have joint and a number of private legal responsibility. Officers, directors, members, managers, partners and minimal legal responsibility partners are also personally liable, jointly and severally, with their organization entity and each individual other for all claims’ costs, civil penalties and legal professional charges if it can be established that the ” unbiased contractor” was actually an “worker” when they had been hurt whilst functioning. ORS 656.735.
When a misclassified worker is hurt on the position, they are not only free of charge to carry a individual damage motion in opposition to their employer but the employer loses the profit of any defense dependent on the employee’s possess contributory carelessness. ORS 656.020.
Furthermore, folks liable for compliance with an employer’s unemployment insurance policy might be held individually liable, jointly and severally with every other and with their employer, for unemployment added benefits and declare costs for an worker misclassified as an independent contractor. ORS 657.516.
Appropriately, whether to address any individual giving services to a business enterprise as an unbiased contractor is a final decision which need to be made with caution. A mistake could not only destruction your company but drain your personal finances as nicely.
© 12/12/2013 Lawrence B. Hunt of Hunt & Associates, P.C. All legal rights reserved.