Every morning I pour a cup of coffee, grab the newspaper, and turn directly to the sports page. It’s my way of relaxing before I have to think about work. Unfortunately, not lately.
Earlier this year, I read about harassment and bullying within the Miami Dolphin’s team; later that the NFL is grappling with how they’ll handle openly gay players; and now the NLRB has determined that the Northwestern University football players can unionize. It’s getting to the point that there is no escape from work. The sports page is becoming the new edition of LexisNexis.
I am not going to address any of these three issues directly today. But the NLRB’s decision implies that the players are “employees” and that’s a good segue to what I want to discuss with you: what is an employee? This sounds basic, but it isn’t, and incorrectly defining someone as NOT an employee can have significant consequences to you and your company. Let me explain.
First a definition: “An employee is a person who works in the service of another under express or implied contract for hire, under which the employer has the right to control details of work performance” (Black’s Law Dictionary). That’s clear until you understand there are some broad exceptions to that definition created by the U.S. Department of Labor. Independent contractors and student interns are not employees. Still with me? OK, here it comes.
Independent contractors are not employees and therefore, under the law, employers who engage them have no obligation to withhold taxes or offer benefits (workers comp, unemployment comp and the usual holidays, etc.). But where you can get into trouble is when the IRS, or the Department of Labor or the state views this Independent Contractor as an employee. Now you’re in trouble.
The general rule is that an individual is an independent contractor “if Continue reading