Independent Contractor or Employee?

Written by greg on December 1, 2014

 

 

Whether or not you can hold an entity accountable for the actions by someone doing work for them can often turn on whether the negligent person was an employee or an independent contractor.

 

It is noteworthy that the characterization placed upon the relationship by the entity paying the tab (employer) may not prove to be the correct one. Many contractors prefer to attempt to avoid tax responsibilities and liability by calling everyone that works for them an “independent contractor”.

 

TESTS FOR TAX PURPOSES

 

For tax purposes the United States Supreme Court has held the following factors important in determining if an employer owed Social Security taxes on a worker:

 

  • The degree of control exercised by the alleged employer;
  • The extent of the relative investments of the [alleged] employee and employer;
  • The degree to which the “employee’s” opportunity for profit and loss is determined by the “employer”;
  • The skill and initiative required in performing the job; and the permanency of the relationship.

 

See Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042 (5th Cir. 1987).

 

 

Courts will look beyond the characterization given by the alleged employer to determine whether or not the individual was actually an employee or an independent contractor.

 

An employer must control not merely the end sought to be accomplished, but also the means and details of its accomplishment. See Thompson v. Travelers Indem. Co., 789 S.W. 2d, 254, 259 (Tex. App.-1990).

 

IN SOME CASES A CONTRACTOR (WHO IS NOT THE EMPLOYER) MAY BE LIABLE FOR AN ACCIDENT BY RETAINING CONTROL

 

In construction law or contractor liability, the case of Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778 (Tex. 2001), was an important one holding that a general contractor can owe a duty of reasonable care to an independent contractor’s employee by retaining sufficient control over the work.

 

 

Generally, a contractor must retain the right of supervision that affects how the work is done. It is important to note that a contractor can retain control of the work by a contractual provision.

 

If you have been injured in an on-the-job accident or an injury at a construction site where another company was at fault, call us for a free confidential consultation regarding your rights and options.

(281) 587-1111.

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