From Lexology, Joseph T. Clees, Meaghan K. Kramer, and Christopher J. Meister of Ogletree Deakins share information on managing the employment relationship in Arizona including guidance on classifying workers properly as employees or independent contractors. They write:
Are there state-specific rules regarding employee/contractor misclassification?
Arizona courts look at the totality of the circumstances when determining whether an employee has been misclassified as an independent contractor.
For minimum wage purposes, Arizona follows the Fair Labor Standards Act to define whether an individual is an employee or independent contractor (see A.R.S. § 23-902 (the minimum wage statute)). Arizona courts apply an “economic realities” test, which mirrors the “economic realities” test under the Fair Labor Standards Act (A.A.C. R20-5-1205).
Arizona Revised Statutes § 23-902 (the workers’ compensation statute) provides that a written agreement between the employer and independent contractor which discloses that the contractor is not entitled to workers’ compensation benefits, among other things, can create a rebuttable presumption that the individual is an independent contractor.
Read the full story at Managing the employment relationship in Arizona