EMPLOYEES VS. INDEPENDENT CONTRACTORS IN FLORIDA
Though there are many distinctions between employees and independent contractors, possibly the most apparent one is that an employer of an independent contractor does not have the right to control or direct the means or method of completing the work results, only the result of the work itself. Put differently, the right to control is a vital element when determining whether the person employed is an independent contractor or an employee.
There are three overarching classifications of control:
- Financial control
- Behavioral control
- The type of relationship which exists between the employer and the worker.
The Florida Department of Revenue takes these general ideas of control and further deciphers the differences between independent contractors and employees, by using special principles, with a core theme of “who sets the rules of work”. For example:
- The extent of control which (by agreement between the employer and the worker) the business may exercise over the details of the work
If the employer holds the right to prescribe how the work should be done, the worker is an employee. If the employer chooses what work the worker will do and how the worker will do it, then the worker is an employee. When an employer hires an independent contractor, the employer is typically interested only in the end result, not the details of how the contractor performs the work.
- Whether the one employed is engaged in a distinct occupation or business
A person engaged in a distinct occupation or business is more likely to be an independent contractor if the occupation or business is independent and conspicuously different from the employer’s business.
- Whether the work done in a certain area is usually done under the direction of the employer or by a specialist without supervision
If the work is usually done in that area under the direction of an employer, then the worker is more likely to be an employee. If the work in that locality is usually done by a specialist without supervision, then the worker is more likely to be an independent contractor.
- The skill necessary in the particular occupation
The greater the skill necessary for the occupation, the more likely the worker is an independent contractor. A contract for labor only will ordinarily be considered a contract of employment while the hiring of a licensed professional is more likely to be considered the hiring of an independent contractor.
- Whether the employer or the worker provides the instrumentalities, tools, and the place of work for the person doing the work
Independent contractors are generally expected to provide or purchase everything they need to do the job. Employees are not expected to provide their own workplace, materials, tools, and supplies, or to otherwise invest their own money in the business.
- The period of time the person is employed
The more long-term, continuous, and exclusive the relationship is, the more likely it is to be employment.
- The means of payment, whether by the time or by the job
Independent contractors generally perform their work one job at a time and are paid by the job. An employee is paid for his time.
- Whether the work is a part of the regular business of the employer
If the service provided by the worker is an integral part of the service the employer provides to the public, the worker is more likely to be an employee. If certain services are so essential to a business that it will succeed or fail based upon how well those services are performed, the business will often want to exercise enough control over the services to ensure they are good. That can make a business the employer of such workers.
- Whether the parties believe they are creating the relationship of employer and employee
If there is a written agreement between the parties describing the relationship it should be honored unless other provisions of the agreement, or the actual practice of the parties, show that the agreement is not a valid description of the working relationship. If the actual practice of the parties shows an employee relationship, an agreement which describes the worker as an independent contractor will be disregarded. How the worker is treated, not the language of a written agreement or the issuance of a 1099, regulates whether the worker is an employee or an independent contractor.
- Whether the hiring party is or is not a business
If the hiring party is a business, it is more likely that the worker is an employee. If the hiring party is an individual, the worker is more likely to be an independent contractor.
Under FLSA (Fair Labor Standards Act), an employment relationship should be differentiated from a contractual relationship. An employee is dependent on the business he or she works for—the FLSA calls this an “economic reality.” The U.S. Supreme Court has indicated more than once that no single rule or test determines whether a worker is an employee or an independent contractor, rather the work situation must be taken as a whole. The Supreme Court considers:
- The permanency of the relationship
- The alleged contractor’s investment in equipment and facilities
- The degree of control by the employer
- The alleged independent contractor’s opportunities for profit and loss
- The extent to which the services rendered by the employee or independent contractor are an integral part of the employer’s business
- The employee or independent contractor’s degree of independent business operation and organization
- The amount of initiative required by the worker for success
It should be noted that some workers have special rules which do not fall under the laws for independent contractors vs. employees. These include emergency workers, workers for elections, elected and public officials, and medical residents. There is no set numbers of factors which deem a worker an independent contractor or an employee, and factors which may be applicable in one situation may not be applicable in another. The overall relationship must be carefully analyzed to determine whether a worker is correctly classified.
Sweeney Law, P.A. Has Vast Experience in Matters Involving the Classification of Workers as Employees or Independent Contractors
Brendan A. Sweeney, Esq., LL.M., of Sweeney Law, P.A., a boutique firm in Fort Lauderdale, Florida, regularly handles complex transactional and litigation matters throughout Florida. Brendan A. Sweeney, Esq., LL.M. is an AV Preeminent Martindale Rated Attorney, that has been recognized as a Florida Super Lawyer in 2019, Florida Legal Elite in 2019, and as a Florida Super Lawyer Rising Star in 2018, 2017, 2016, 2015, and 2014. If you have any questions and/or issues regarding the classification of workers as employees or independent contractors then contact Sweeney Law, P.A. at (954) 440-3993 immediately to protect your rights. www.sweeneylawpa.com.