If an individual is found to be an independent contractor under Title VII of the Civil Rights Act of 1964, that individual cannot sue for discrimination under that law because they are not an employee. Only employees can claim legal protection under Title VII. A surgeon recently discovered this legal reality when she sued the hospital for discrimination. She sued because the hospital revoked her medical practice privileges. She claimed to be an employee (and not an independent contractor), and therefore sued the hospital as her employer under Title VII on the basis of her sex, religion and ethnicity.
The IRS uses a Questionnaire called the IRS Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding) to determine when a particular "worker" is an independent contractor and when the "worker" is an employee.
Many Illinois trucking companies have independent contractor agreements for owner-operators (to help establish an independent contractor relationship between the Illinois trucking company and the owner-operators who perform services as truck drivers for the trucking company).
Here are some of the most news-worthy developments in labor law for the first months of 2019.
Applying the very strict "ABC test" defining independent contractor status under Indiana's unemployment insurance law, the Indiana Supreme Court ruled that a company (Q.D.-A.) did not misclassify its driver as an independent contractor. Q.D.-A. was found not to be the employer of the driver in question. Therefore, Q.D.-A. did not owe the Indiana Department of Workforce Development any back unemployment insurance taxes.
ROLE OF STATE LEGISLATURE: Surprising to many, state legislatures solely determine the legal test that is used in a particular state for evaluating whether a "worker" in question is an independent contractor or an employee (for purposes of obtaining state unemployment insurance benefits).
Clients are increasingly aware of the growing number of class action lawsuits across the United States. What should the worried company owner do? The logical response is to have independent contractors (or employees) sign a contract under which they agree to mandatory arbitration of all disputes, claims or causes of action arising out of or related to the independent contractor (or employment) relationship with the Company.
In September 2018, yet another lawsuit was filed against Uber, the ride-hailing company that has had several lawsuits filed against it, many about the classification issue of whether Uber drivers are employees or independent contractors. Uber has found some effective legal defenses in these lawsuits against it, so now a unique kind of lawsuit has been added to the lineup of lawsuits against Uber.
If you are acquiring a Company through purchase and you are not paying close attention to potential Labor issues, you could be creating serious and risky problems for the future. It is extremely important to understand that liability in the context of Labor and Employment related issues are governed by Contract and Common Law Successorship with an overriding theme of "protecting the little guy." This is vastly different from the traditional Corporate Veil Piercing Analysis that exists in traditional Corporate Law.
Exotic dancers can be properly classified as either employees or independent contractors depending on how the working relationship is structured. But when the independent contractors believe they have been misclassified and should have really been employees, lawsuits may result.