January 30, 2023 - Few issues are likely to evoke more divergent views from employment lawyers than the role and classification of independent contractors in the U.S. workplace. This is for a host reasons, but in large part is due to the evolving legal standard for when and under what circumstances U.S. businesses can properly classify workers as contractors.
It is also due to the fact that the consequences of misclassifying a worker as an independent contractor — which potentially range from unpaid wages and tax contributions to civil penalties and liquidated damages — can be significant, particularly for businesses that utilize a substantial number of contractors.
In this article, we will discuss the traditional independent contractor model, how that model and the corresponding legal standard for assessing contractor classification is evolving in the U.S., and best practices for businesses seeking to minimize their liability on this front.
Broadly speaking, a U.S. worker can be classified as either an employee (an individual to whom statutory wage payment and other legal protections apply) or an independent contractor (to whom such protections generally do not apply).
Although the vast majority of the U.S. workforce falls into the former category, independent contractors serve an important function in the economy and offer businesses many benefits. To take advantage of these benefits without risking the...
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