Delaware Independent Contractors laws & HR compliance analysis

Delaware 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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Whistleblowers. The Delaware Whistleblowers' Protection Act protects both employees and independent contractors (DE Code Tit. 19 Sec. 1702).
Construction industry. Delaware has enacted the Workplace Fraud Act, which makes it specifically illegal for an employer in the construction services industry to improperly classify an individual who performs work for remuneration as an independent contractor (DE Code Tit. 19 Sec. 3501 et seq.).
For purposes of determining coverage under the workers' compensation laws, the Delaware Supreme Court has ruled that there are four elements that may be taken into consideration in determining if an individual is an employee or an independent contractor. These are (1) who hired the employee, (2) who may discharge the employee, (3) who pays the employee's wages, and (4) who has the power to control the conduct of the employee when he or she is performing the particular job in question (Lester C. Newton Trucking Co. v. Neal, 204 A.2d 393 (1964)). Delaware courts have also ruled that an independent contractor is an individual who is engaged to do work in an independent manner, accountable only for the results obtained and not subject to the control or supervision of the employer, and that the test ...

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