June 19, 2024

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The Pitfalls of Mistakenly Dealing with “Staff” As Impartial Contractors

Tiny enterprises normally favor to address workers as independent contractors for any variety of explanations: avoiding the bother of calculating and paying out personnel withholdings escaping the employer’s required charges for unemployment insurance plan, workers’ payment, and other costs and, independence from time beyond regulation and other wage and hour regulations. In limited, treating employees as “unbiased contractors” can exert a strong attraction on a smaller business.

Like quite a few other strong temptations, treating an staff as an unbiased contractor can also guide specifically to hell if the staff is not a single. The litany of hellish outcomes, each for an employer and for its dependable officers and fairness entrepreneurs, is sobering.

To start with there are the unpaid withholdings for which not only the employer but also its liable officers and directors may perhaps have joint and various particular legal responsibility. Officers, administrators, members, managers, companions and confined liability companions are also personally liable, jointly and severally, with their company entity and every other for all claims’ expenditures, civil penalties and legal professional fees if it can be established that the ” impartial contractor” was truly an “staff” when they have been injured while functioning. ORS 656.735.

When a misclassified worker is wounded on the career, they are not only no cost to carry a private damage motion versus their employer but the employer loses the profit of any defense based mostly on the employee’s possess contributory negligence. ORS 656.020.

Also, folks accountable for compliance with an employer’s unemployment coverage may be held personally liable, jointly and severally with each and every other and with their employer, for unemployment rewards and declare prices for an worker misclassified as an unbiased contractor. ORS 657.516.

Appropriately, no matter if to take care of any specific furnishing expert services to a company as an unbiased contractor is a selection which should be created with caution. A error could not only hurt your business enterprise but drain your own funds as perfectly.

© 12/12/2013 Lawrence B. Hunt of Hunt & Associates, P.C. All rights reserved.