The independent contractor: to be or not to be

From Lexology

The story is a familiar one: employer engages services of an independent contractor, subsequently terminates those services, and the independent contractor files a claim for unemployment insurance benefits. The employer responds to the unemployment insurance claim by stating that the individual is not entitled to benefits because he or she is an independent contractor. The state unemployment insurance division then commences in investigation into the claim and, oftentimes, commences a full audit into the employer’s payments to all independent contractors. Like many states, the federal government has also increasingly focused on classification issues. Challenges often arise in audits of the employers by the US Department of Labor.

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