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    Employee Rights and Legal Regulations

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    I need help with answering the following questions:

    1. How do courts decide who is an employee and who is an independent contractor?

    2. What are the possible legitimate reasons for which an employee can challenge a wrongful termination?

    3. In what situations does a terminated employee have no recourse?

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    Please see response attached for best formatting, which is also presented below. I hope this helps and take care.



    Interesting questions! Let's take a loser look at each question. There should be at least 3 pages of information to draw from, as well as links for other pertinent information as well.

    1. How do courts decide who is an employee and who is an independent contractor?
    One critical to distinguish an independent contractor from an employee is the degree of control over how the work is accomplished. However, there are many factors to consider in making a determination as to whether a worker is an independent contractor or an employee.

    Some of these criteria include:

    (1) whether a distinct occupation or business is being performed;

    (2) the amount of supervision over the means by which the work is performed;

    (3) the degree of skill required to perform the work;

    (4) who provides the tools used to perform the work, and

    (5) the place where the work is done;

    (6) the ability of the person performing the work to work for others at the same time;

    (7) the ability to terminate work in progress without affecting the basis of payment for the work performed (that is, whether the person performing the work can end the project and still get paid by the purchaser of the service);

    (8) who determines when the work is to be performed (regular hours vs. self-scheduled hours);

    (9) the basis of payment (payment by the hour, day, week, or month during which the services are performed, or payment only for actual work completed)

    (10) the basis upon which termination of the agreement can be made (can it be terminated at will, or for failure to deliver work as agreed), and

    (11) the length of time during which the services will be performed.

    Whether a worker would be found to be an independent contractor or an employee rests upon weighing the relative factors. Purchasers of services performed by others must be careful since an incorrect classification of a person as an independent contractor or an employee can result in penalties being assessed against the employer. If a purchaser of services is deemed to be an "employer" (and thus the "independent contractor" deemed to be an "employee"), the employer maintains responsibility for the payment of taxes, insurance and benefits for that employee (http://employment-law.freeadvice.com/employee_contractor.htm).
    In sum, what is the difference between an independent contractor and an employee?
    This distinction is especially important with respect to how income earned by an employee or independent contractor is handled for tax purposes, in addition to whether laws governing the relationship between an employer and an employee will apply.

    Employees' paychecks are subject to the withholding of personal income tax (both federal and state). An employer has one-half of the Social Security tax and the Medicare tax deducted from the employee's wages, and the employer contributes the other half. An employer makes contributions to the federal (and sometimes state) unemployment insurance system, various state employment systems (such as disability or education and training), and provides worker's compensation for the employee in case of an accident which occurs during the course of employment. This "loading" for taxes and benefits can represent a cost to an employer of an additional 20% to 35% over and above an employee's gross wages.

    An independent contractor is in business for him/herself. The independent contractor makes quarterly federal and state personal income tax deposits (based on yearly estimates), pays the entire contribution to social security and Medicare taxes, and provides his/her own insurance and benefits. An independent contractor is not subject to wage and hour regulations and does not benefit from any unemployment insurance program.

    There is no employer-employee relationship between an independent contractor and the person or entity that purchases his/her services. The independent contractor controls the means by which the work is performed, while the purchaser of the services retains control over the result of the work (http://employment-law.freeadvice.com/independent_employee.htm).

    Click here for an informative article on company policies regarding employees and contractor.

    2. What are the possible legitimate reasons for which an employee can challenge a wrongful termination?

    This depends on whether the employee is considered an "at will" employee or "for-cause" employee. For example, in most states of the United States all employees are considered "at will" employees. That means that the employer can terminate or change the employment relationship "at will", unless there is a contract with the employer. In general, an employer can fire an "at will" employee, or change ...

    Solution Summary

    Referring to Employee's Rights, this solution explains how courts decides who is an employee and who is an independent contractor. It also identifies and discusses the possible legitimate reasons for which an employee can challenge a wrongful termination, and in what situations a terminated employee has no recourse.