![]() If they have out of pocket expenses, their employer pays them. When the contactor gave a price for the job – it is an hourly rate, plus expenses? Plus other costs? A true contractor provides one overarching price for the work, and then takes the liability of having priced it wrong.Īnyone who’s ever had to cut a client bill, or done something over for free knows who had the liability for profit or loss on that project – you did.Įmployees are paid by the hour, or by their salary, whether they do a good job or not. In other words, who bears the burden if the job takes longer and/or costs more than originally anticipated. ![]() One thing the agency will consider is the alleged contractor’s opportunities for profit and loss. Rather, the agency will evaluate many aspects of the relationship to determine what it actually was as a matter of law. Should a business designate an individual as a contractor, and that person then make a claim asserting they were an employee, the agency will not just take the company’s statement that they were paid on a 1099 and so are not eligible for whatever the employee is seeking. ![]() Government agencies who care about the classification (for example, the DOL considering whether unemployment insurance payments are warranted, or Workers’ Compensation determining whether a claim is valid, or the applicable fair employment practices agency determining whether to dismiss a discrimination claim), will look at a number of factors to answer the question of whether the person was properly classified. Companies need to take care when classifying those who provide services as independent contractors or employees.
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