The first part of this article discussed the economic realities test which is applied in minimum wage, overtime, and Family & Medical Leave Act cases.  If the case at issue involves, for example, race discrimination under Title VII, sex discrimination, disability discrimination, etc., then the courts apply the common law test to determine whether the worker was an employee or an independent contractor.

The elements of the common law test are: (1) the intention of the parties (i.e., did the parties intend to enter into an employee/employer relationship or did they agree to create an independent contractor relationship); (2) the skill required in the particular occupation (this element is similar to economic reality test element number four); (3) the party furnishing the equipment and the place of work (this element is similar to economic reality test element number three); (4) the method of payment, whether by time or by the job (this element is similar to economic reality test element number two); (5) the type of employment benefits provided (i.e., if the employer provides the worker with medical insurance, then this factor tends to prove employee status); (6) the manner in which the work relationship is terminated (i.e., if the worker can be terminated at-will, then that tends to prove employee status); (7) the importance of the work performed as part of the business of the employer (this element is similar to economics reality test element number six); and (8) the manner in which taxes on income is paid (i.e., if the employer deducts standard payroll taxes, then this factor tends to prove employee status).

There are subtle differences between the economic realities test and the common law test.  The critical difference is that the common law test is generally regarded as setting a slightly higher threshold to proving employee status.  However, the courts are generally in agreement that even under the common law test, both tests are designed to measure the degree of control that the purported employer exerts over the employee.  Therefore, the fact that an employer does not offer insurance benefits may have less to do with independent contractor issues and more with the fact that the employer simply does not wish to incur this cost.  Furthermore, some courts have construed an employer’s unilateral refusal to deduct payroll taxes as a condition of employment not as proof of independent contractor status but rather proof that it exercises substantial control over the worker.  Should you have any questions regarding your current arrangement, feel free to contact one of the employment attorneys at Bogin, Munns & Munns, P.A. to coordinate a consultation.

– Daniel Perez, Esq., is an attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Perez works out of the Melbourne office of the firm and welcomes questions and comments regarding the above and can be reached at dperez@boginmunns.com

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