It has been estimated that by 2020, about 40 percent of American workers will
independent contractors. That could have important considerations for businesses when deciding which employees need to be covered by workers' comp.
"What the employer was trying to do, clearly, was call him an
independent contractor in the contract, and that's not determinative of someone being an
independent contractor" for tort liability purposes, Denton said.
As you navigate the gig economy, remember that the best evidence of an
independent contractor relationship is the contract itself.
Independent contractors who perform work for your business operate under their own business names.
[(Name) is an agent if (defendant) authorized [him] [her] to act on (defendant's) behalf.] [(Name) is an apparent agent if, by words or conduct, (defendant) caused or allowed (claimant) to believe that (name) was an agent of and had authority to act for (defendant).] A person is responsible for the negligence of [his] [her]
independent contractor if, at the time and place of the incident, the
independent contractor was an [agent] [or] [apparent agent] of the employer and was acting within the scope of his or her [apparent] authority.*
Motor carriers, like any other industry, may structure their business model to use either
independent contractors or employees.
3509(a)(2), if an employer misclassifies an employee, the employer will face a back Social Security tax in the amount of 20% of the employee's FICA tax liability if he or she had been treated as an employee, assuming that the employer followed all the correct reporting requirements for an
independent contractor. If the employer did not follow the correct procedures, the amount due doubles to 40% of the employee's share of FICA tax liability if he or she had been treated as an employee (Sec.
That payment was needed to settle claims brought by the workers who claim that they were misclassified as
independent contractors and should have been considered FedEx employees.
Misclassification occurs when businesses wrongly classify workers as
independent contractors. Very rarely is the
independent contractor misclassified as an employee but in theory, it could happen.