MGT 434 Employment Law Employer/Employee Relationship

Topics: Employment, At-will employment, Law Pages: 5 (1334 words) Published: June 17, 2008
To determine whether an individual is an employee or independent contractor under the common law, the relationship of the worker and the business must be examined. All evidence of control and independence must be considered. In an employee-independent contractor determination, all information that provides evidence of the degree of control and degree of independence must be considered.

Independent Contractor or EmployeeUnder federal and state laws, an independent contractor must be just that, independent. He or she must provide a product or service without punching a time clock or being told how to do the job. Independent contractors are described as persons engaged in occupations who contract to perform work according to their own methods, without being subject to control of the employer except for the result. Before an employer can determine how to treat payments it makes for services, the employer must first know the business relationship that exists between employer and the person performing the services. The person performing the services may be an independent contractor or an employee. Simply because an employer refers to a worker as an independent contractor or he or she has agreed to the arrangement in a written contract does not mean that the individual is correctly classified as an independent contractor. Likewise, the fact that payments are issued by accounts payable rather than the payroll department also does not mean that the person is an independent contractor. The nature of the relationship between the individual and the employer is the true determinant, and misclassification can result in serious consequences for an organization.

In Mary's case, the scenario is vague and may need a little more information in order to give an accurate assumption on whether or not Mary is a contractor or an employee. Mary was hired for a special programmer project as a contractor and just as the project was nearing completion, a new project came into play. For this new project, Mary was required to use company materials and equipment while adhering to company schedules, which makes it seem as though she was being treated as an employee. Mary, at one point being an independent contractor, has now developed a relationship with the employer, the more likely there is an employer/employee relationship, and the tables at this point have turned.

Not only has Mary been working for the company for a number of years, Mary is now working under the supervision of a supervisor, using company materials and equipment, not to mention that she now has to adhere to the company work schedules. Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done (Internal Revenue Service, 2004).

Employer / Employee RelationshipThe employer/employee relationship between Mary and Little Lamb has changed over the course of time. With respect to Mary's services, are they regularly available to the general public? They should be, and if Mary does not attempt to make the availability of his/her services known to the general public, her relationship with Little Lamb could be viewed as an employer-employee relationship. The primary issue here is who is running the ship. Does Little Lamb have the right to hire or fire, determine the wage or salary to be paid, and decide on the time, place, and manner in which the work is to be done? If so, then the employer-employee relationship exists. Also, even if Little Lamb does not directly control Mary's activities, but has the right to do so, the notion of control still exists. Under the common-law (20) criteria test, an employer-employee relationship is present between Mary and Little Lamb Company.

Employment at-willOne critical employment law issue affecting employee handbooks and policy manuals is employment at will. Employment at will is traditional common law perspective that an employee may seek work and quit at any time,...

References: Castagnera, J. (1988). Personnel Law Book. Greenvale, New York: Panel PublishersFalcone, P. (2004). A legal Dichotomy. Retrieved September 24, 2006 from: http://www.shrm.orgInternal Revenue Service. United States Department of Treasury. Retrieved September 25, 2006 from: http://www.irs.govShilling, D. (1998). Human Resources and the Law. Printice hall. Paramus, New Jersey.
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