In 2015, DOL faced numerous complaints from workers who claimed that they had been wrongly considered independent contractors. In response, David Weil, director of DOL, revealed the administrator`s interpretation, No. 2015-1, that a worker who is not properly ranked does not have employment protection (i.e. minimum wage, overtime compensation, unemployment insurance and workers` compensation) and the government believes that tax revenues are lower. Administrator Weil made it clear that THE DOL would curb misclassification on the basis of a very broad view of the working relationship that led most workers to work. An independent contractor is more likely to acquire relevant skills through training, learning or prior knowledge when a worker is more likely to be trained by the employer. Instead, an independent contractor has made a « capital investment » in the tools or equipment needed to provide services when an employee uses tools provided by the employer. An independent contractor has the opportunity to increase profit on the basis of his management and skills, where an employee earns more by taking over more hours or additional tasks. It is likely that an independent contractor will decide how and when he or she works, where a worker is likely to perform tasks, when and how the employer does so. The more integrative the services to the company, the more likely it is that the worker is a worker. If you let someone work for you, the employer, you must determine whether you have hired an « independent contractor » or an « employee. » « classification »: the term « labour lawyer » to determine whether the worker is a worker or an independent contractor. Classification has very important legal and financial implications for you, the business owner or business owner. Recent court decisions, including Benion v LeCom, Inc., 336 F.Supp 3rd 829, 838 (ED Mich 2018), effectively reduce the classification determination to the long-standing « economic reality test. » This six-factor test encourages the courts to consider: the sustainability of the relationship; The level of competence The worker`s investment in « tools, » the worker`s possibility of profit or loss; Degree of control over work and whether the service provided is an integral part of the employer`s activity.
As a general rule, an independent contractor has a variable or imperishable employment relationship that enters into a new relationship when offered work in which a worker generally works continuously and unlimitedly for an employer. However, if a government agency discovers that you have « misclassified » an employee as an independent contractor, you will find yourself in a very difficult and expensive position. Government agencies, which include the IRS and the U.S. Department of Labor (« DOL »), can cooperate and exchange information between the Michigan Unemployment Agency and the Treasury Department. Therefore, when an agency questions your classification, that agency can work with other agencies to maximize the recovery of the money to be paid to those utilities. An independent contract contract in Michigan establishes a business relationship between an individual company or entity and a contractor. This legally binding document consists of terms negotiated by both parties for the contractor`s benefits for compensation.