Many of the problems employers have in regard to worker classification arise when determining whether a worker is an employee or an independent contractor. It may be cheaper to use independent in a business than employees because the taxing and reporting requirements are much less costly than they are for employees. It is incumbent for the Little Lamb Company to determine whether or not an employee-employer relationship exists or whether Mary should be paid as a contractor. Independent Contractor or Employee
Under the common law test, if the employer has the right to control what work will be done and how that work will be done, then an employer-employee relationship exists and the worker is a common law employee. This is true regardless of whether the employer actually exercises the right on a regular basis. However, if an individual is subject to the control or direction of another only as to the results to be accomplished, and not as to the details by which those results are accomplished, the individual would not be an employee under the common law test. It makes no difference what the worker is called by the employer. A contractor is still an employee if the employer controls the work that is to be done. (Employee vs. Independent Contractor, 2005) Changing Relationship
Under contract, Mary started with the Little Lamb Company as an additional programmer for a special project. Nearing the end of that project, Mary was asked to continue with a new project that had arisen. At first, the services rendered by Mary could have been viewed as part of a separate business, thus identifying Mary as an independent contractor. She worked independently to achieve specified results. There is no employer-employee relationship between an independent contractor and the person or company that purchases his/her services. The independent contractor controls the means by which the work is performed, while the purchaser of the services retains...
References: Employee vs. Independent Contractor. (2005). Retrieved from the internet June 16, 2005
Employment at Will. (2005). Retrieved from the internet June 16, 2005 from
Public Policy. (2005). Retrieved from the internet June 16, 2005 from
Wikipedia. (2005). Contract. Retrieved from the internet June 16, 2005 from
Please join StudyMode to read the full document