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Independent Contractors: What you need to know

An independent contractor is a worker who individually contracts with an employer to provide specialized or requested services on a project or as-needed basis. There is really no absolute definition of an independent contractor. The important distinction, from the point of view of an employer, is that an independent contractor is an individual who is performing services for the employer but who is not an employee. Courts and government agencies generally examine the nature of the relationship between workers and employers to determine a particular individual's status. Independent contractor status is generally characterized by an “arm's length” relationship between the worker and employer.
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Consequences of treating an employee as an independent contractor. Independent contractors are not covered under numerous federal laws. Depending on the particular law, courts have applied different tests for determining whether an individual is an employee or an independent contractor.
Common-law test. The IRS/common-law test has been used for the following laws:
• Federal Insurance Contributions Act
• Federal Unemployment Tax Act
• Income tax withholding
• Employee Retirement and Income Security Act
• National Labor Relations Act
• Immigration Reform and Control Act
Economic realities test. Under the economic realities test, an employment relationship exists if an individual is economically dependent on a business for continued employment. The economic realities test has been used for the following laws:
• Title VII of the Civil Rights Act
• Age Discrimination in Employment Act
• Americans with Disabilities Act
• Fair Labor Standards Act
• Family and Medical Leave Act (likely to apply)
Hybrid test. A hybrid ...

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Independent Contractors Resources

Independent Contractors Products

Employee vs. Independent Contractor Webinar Recording
BLR Webinar: "Employee vs. Independent Contractor: Where’s the Line? How to Make the Proper Call and Stay Out of Court""
Exempt or Nonexempt Webinar Recording
BLR Webinar: "Exempt or Nonexempt? Determining Employee Classification and Overtime Compensation""
Exempt vs. Nonexempt Webinar Recording
BLR Webinar: "Exempt vs. Nonexempt: How to Find and Fix Misclassification Mistakes""
Employee vs. Independent Contractor Webinar Recording
BLR Webinar: "Employee vs. Independent Contractor: Where’s the Line? How to Make the Proper Call""
Exemption Audits Webinar Recording
BLR Webinar: "Exemption Audits: Prepare Now for Stepped-Up DOL Enforcement""
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Claim Your Free Copy of Top 100 FLSA Overtime Q&As

We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave

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