In New York, there are areas of employment law can sometimes be confusing if not outright blurred. One of the most common areas of employment where this can come up is determining whether a worker is an employee or an independent contractor. Since misclassifying an employee as a contractor and vice versa can be so problematic, it is imperative to know the fundamentals.
One of the most basic areas that will define a worker’s status is the right to control. When there is a dispute, there are tests to determine how to categorize a worker. Since worker rights and benefits frequently hinge on this determination, both sides need to understand it.
Control is a key factor with independent contractor vs employee status
In short, an independent contractor is not obligated to do as they are told to retain their status, whereas an employee is expected to do as they are told within the parameters of the job. For example, an employee will be given instructions as to how to go about their duties. An independent contractor – a painter for example – would be told what the business wants done and the contractor is left to complete the project using their own equipment and materials.
Another area where control is exerted is with training. An employer regulates how an employee is trained. With the painting example, the contractor is not being trained in how to do their job by the company that hired them to paint. For employer-employee issues, the company will generally have policies, procedures, and tools. The employee is expected to adhere to that. A contractor will not be beholden to this.
Contractors make their own schedule as long as the project is done by a certain date and time, while the employee has specific times when they must report to work and can leave. The employee’s performance is under greater scrutiny than the independent contractor’s with recourse if the employee does not follow to the rules.
Independent contractors are left to their own devices, are autonomous, do the job as they see fit, are not functioning under evaluations from an employer, and are not trained by the employer.
Clarity is crucial with employee vs contractor classifications
A business can face significant problems if they are accused of misclassifying employees as contractors. Since employees are granted legal rights when it comes to benefits and protections, this can be a costly legal entanglement. Workers should also be cognizant of how they can face financial and personal problems because of misclassifications. Both sides need to have guidance with the classification of employees and address confusion and disputes as they come up.