Alabama Independent Contractors laws & HR compliance analysis

Alabama Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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Alabama follows the common-law test when evaluating whether an individual is an employee or an independent contractor. Alabama looks at the following 20 factors. Depending upon the type of business and the services performed, not all of the 20 common-law factors may apply. In addition, the weight assigned to a specific factor may vary depending upon the facts of the case.
1. Instructions: An employee receives instructions about when, where, or how the work is to be performed. An independent contractor does the job his or her own way, with few, if any, instructions as to the details or methods of the work.
2. Training: Employees are often trained by a more experienced employee or are required to attend meetings or take training courses. An independent contractor uses his or her own methods and thus need not receive training from the purchaser of those services.
3. Integration: Services of an employee are usually merged into the firm’s overall operation, and the firm’s success depends on those services. An independent contractor’s services are usually separate from the client’s business and are not integrated or merged into it.
4. Services rendered personally: An employee’s services ...

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