Posted by Dan Phelan on Mon, Apr 26, 2010 @ 07:51 AM
Today's Post comes from another one of the Risk Advisor Allstars at CRA, Debbi Kuhne, our Director of Client Services
Many companies hire what they deem to be Independent Contractors and not employees. This is now being scrutinized more and more by both the Department Of Labor and the Connecticut Workers Comp commission and more lawsuits are being filed every day in both areas. So, how do you make the decision? It isn't necessarily an easy one as you can see from the information below.
Connecticut Workers Compensation Statutes do not give a definition of an Independent Contractor. They offer guidelines to follow and each case is reviewed individually. The Commission suggest you review Behavioral Control (where the individual works, who provides the tools and supplies) Financial Control (is the workers given a check based on an hourly rate or a per job basis) and finally, Type of Relationship (is there a written contract, is there an assumed permanency of the position).
The DOL is much more definitive of those individuals to be considered an independent contract. The following tests must all be met in order for the individual to qualify.
1. Must be free from control and direction
2. His/her service must be performed outside of any place of business of the employer
3. Must be customarily engaged in an independently established trade, occupation, profession or business.
So, what does it matter if you misclassify a worker? Here are some of the laws under which you could be fined and/or sued:
• Wage and hour laws
• Minimum wage law
• State overtime law
• Law on keeping payroll records
• Withholding taxes and payment of social security benefits
• Willful understatement of payrolls for workers compensation insurance
• Violation of laws on discrimination.
• Whether you're a Connecticut construction company, distributor, or restaurant owner, seek legal advice before determining an individual is an Independent Contractor and not an employee!
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Please join me in congratulating Debbi as the newly elected Regional Vice President for Region I of the National Association of Insurance Women. She was elected on April 10th at The Regional Conference and will be installed at the National Conference in Washington, DC this June. Her official term will run from July 1, 2010 - 2011.
The Regional Vice President is the ranking officer in the region and is the direct representative to the National Board of Directors of NAIW, International for the Region. Region I consist of - NJ, CT, RI, PA, MA, VT, NH, ME & NY. Debbi will be responsible for communicating with members in the region on news from the National level, presiding over the Regional Conference, formulating plans for the region (growing the membership, establishing new associations), building a team relationship with all members in the region, providing leadership direction, answering questions and concerns of the Council Directors from each State.