Independent contractors; employment at will; common legal issues
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Why do you think the law has established guidelines as to whether workers are classified as either independent contractors or employees? What are the advantages and disadvantages of each classification relative to the employer?
Why do exceptions to employment-at-will exist? Whose interests do these exceptions protect?
Identify at least three common legal issues from an industry with which you are familiar. How might managers apply their knowledge of legal principles discussed in this course to benefit the interests of the organization?
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The expert examines independent contractors employment will and common legal issues.
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Human Resource Management
Why do you think the law has established guidelines as to whether workers are classified as either independent contractors or employees?
For tax purposes, the law has established guidelines as to whether workers are classified as either independent contractors or employees. Within the tax guidelines, there are many taxes that an independent contractor has to pay as opposed to a regular employee. These would include higher FICA (social security) due to having to pay not only the employee's portion but the employer's portion. There are also self-employment taxes to pay. Although, there are more taxes to pay, there are deductions that can be made for materials and items used for working as the independent contractor whereas, the employee cannot deduct items except things not reimbursed for by their company that are deductable.
What are the advantages and disadvantages of each classification relative to the employer?
The advantages to the employer for an independent contractor would be they do not have to pay for health benefits, sick, vacation, or personal time or deduct any taxes out of the money that the contractor receives. The company also does not need to include the contractor on any life or disability insurance and does not have to pay for workers comp or unemployment insurance coverage. This burden is on the contractor.
The employees who work for the employer need to have taxes deducted out of paychecks, receive benefits from the employer such as paid time off, health benefits, life insurance, workers comp and unemployment insurance and the employer needs to keep accurate payroll records for the ...
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