Modest organizations usually like to address employees as unbiased contractors for any range of good reasons: preventing the trouble of calculating and shelling out worker withholdings escaping the employer’s essential expenses for unemployment insurance coverage, workers’ compensation, and other costs and, freedom from overtime and other wage and hour laws. In brief, dealing with employees as “independent contractors” can exert a potent attraction on a tiny enterprise.
Like numerous other robust temptations, managing an personnel as an impartial contractor can also lead instantly to hell if the personnel is not one. The litany of hellish outcomes, each for an employer and for its responsible officers and fairness house owners, is sobering.
First there are the unpaid withholdings for which not only the employer but also its accountable officers and administrators may possibly have joint and various own legal responsibility. Officers, directors, users, supervisors, partners and limited legal responsibility companions are also individually liable, jointly and severally, with their business enterprise entity and each and every other for all claims’ expenses, civil penalties and legal professional charges if it’s determined that the ” unbiased contractor” was definitely an “employee” when they ended up injured whilst working. ORS 656.735.
When a misclassified staff is hurt on the task, they are not only free of charge to convey a private personal injury motion from their employer but the employer loses the profit of any protection based on the employee’s own contributory carelessness. ORS 656.020.
Likewise, people today accountable for compliance with an employer’s unemployment insurance policy may perhaps be held personally liable, jointly and severally with every single other and with their employer, for unemployment advantages and claim expenditures for an staff misclassified as an unbiased contractor. ORS 657.516.
Accordingly, whether or not to address any particular person supplying expert services to a business enterprise as an unbiased contractor is a choice which must be produced with caution. A miscalculation could not only injury your organization but drain your private finances as properly.
© 12/12/2013 Lawrence B. Hunt of Hunt & Associates, P.C. All rights reserved.