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Independent Contractors vs. Employees
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Replies to This Discussion
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Permalink Reply by Daniel Cohen on
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Not sure of the question. What law is that? Or do you mean they shouldn't be requiring it? Using your own supplies is not a major determining factor. Much more at issue is does the contractor have multiple sources of income, do they have control over their business including hours of operation.
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Permalink Reply by Gordon J. Wallis on
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Thats company policy... When I worked in the high end hotels in Hawaii....They paid the therapist 60% and took 40% for themselves.. they furnished all the linens sheets, laundry, tables everything except oil....
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Permalink Reply by Relax & Rejuvenate on
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yes. The hotels SHOULD be requiring ICs to provide all equipment and supplies. There is a legal way for the hotel to provide those things -- starwood has figured it out -- but very few know the law or are bothered to make sure they are compliant.
Just because you sign something agreeing that you are an IC and they give you a 1099 at the end of the year, they rarely are in true compliance.
Things that are usually no-nos that happen often in the hotel world
- Providing equipment/supplies
- Paying you for no-shows or cancellations
- Not penalizing you for a no show or cancellation
- Having you agree to be available at certain times or days
- Paying your fee or tips in cash
- Not requiring a bill or invoice from you summarizing services performed or amounts owed
- Paying you for waiting time for a late client or allowing you to cut short a session for a late client
- not having your 1099, I-9, appropriate licenses or certificate of insurance on file
Or if the hotel is in compliance, often the contractor is not.
For example -- a business - not an individual -- contracts with the hotel. to provide services. That business -- and there are several in every major city operating under this model - in turn subcontracts the work to various MTs.
Bingo -- that business is now a "general contractor" in the eyes of the law. General Contractors are the "intermediary" between the contracting party and those performing the work. 90% of rules/regs/laws for contractors comes from the construction or trucking industgry. A GC must be able to show proof of Workers Comp insurance for all subcontractors. If they can't, the GC must carry WC coverage for its subs, or they run afoul of the state -- and most hotel contracts (every major brand has essentially the same risk management terms, but rarely have we ever been asked to provide proof)
Or, if the person running such a business is an MT who also performs the same services as the ICs. To be an IC, you have to engage in work DISTINCT from the entity contracting you. That is true if the hotel contracts you, or if a non-MT owned company contracts you, but not if your work is indistinguishable from that of the principles or other employees of the company. Then you can be considered an employee -- even if there are no other employees -- and the company is in violation of the state labor board for mis-classifying employees as IC, which automatically runs you afoul of the requirement ot carry WC insurance for all employees, which you retroactively now have!
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WC laws are by state. Rules vary widely state to state so check out your state law. Classification for IC must meet state and federal rules. Remember the difference of IC and employee is complex. It must meet several criteria and some weigh heavier than others but one rule is not the deciding factor.
Relax & Rejuvenate said:yes. The hotels SHOULD be requiring ICs to provide all equipment and supplies. There is a legal way for the hotel to provide those things -- starwood has figured it out -- but very few know the law or are bothered to make sure they are compliant.
Just because you sign something agreeing that you are an IC and they give you a 1099 at the end of the year, they rarely are in true compliance.
Things that are usually no-nos that happen often in the hotel world
- Providing equipment/supplies
- Paying you for no-shows or cancellations
- Not penalizing you for a no show or cancellation
- Having you agree to be available at certain times or days
- Paying your fee or tips in cash
- Not requiring a bill or invoice from you summarizing services performed or amounts owed
- Paying you for waiting time for a late client or allowing you to cut short a session for a late client
- not having your 1099, I-9, appropriate licenses or certificate of insurance on file
Or if the hotel is in compliance, often the contractor is not.
For example -- a business - not an individual -- contracts with the hotel. to provide services. That business -- and there are several in every major city operating under this model - in turn subcontracts the work to various MTs.
Bingo -- that business is now a "general contractor" in the eyes of the law. General Contractors are the "intermediary" between the contracting party and those performing the work. 90% of rules/regs/laws for contractors comes from the construction or trucking industgry. A GC must be able to show proof of Workers Comp insurance for all subcontractors. If they can't, the GC must carry WC coverage for its subs, or they run afoul of the state -- and most hotel contracts (every major brand has essentially the same risk management terms, but rarely have we ever been asked to provide proof)
Or, if the person running such a business is an MT who also performs the same services as the ICs. To be an IC, you have to engage in work DISTINCT from the entity contracting you. That is true if the hotel contracts you, or if a non-MT owned company contracts you, but not if your work is indistinguishable from that of the principles or other employees of the company. Then you can be considered an employee -- even if there are no other employees -- and the company is in violation of the state labor board for mis-classifying employees as IC, which automatically runs you afoul of the requirement ot carry WC insurance for all employees, which you retroactively now have!
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Daniel Cohen said:It must meet several criteria and some weigh heavier than others but one rule is not the deciding factor.
Yes and No. One single factor can determine if someone is an EMP vs. IC.
The problem is the rules change based on who is sitting across the table from you when they are reviewing the case.
Unless you are in a courtroom, legal precedence - where someone was found to be an EMP or IC under similar circumstances -- does not come into play, so you can't point to other examples UNTIL you get to court -- where you never want to be vs. a government agency!
What is not subject to interpretation is the Workers Comp coverage, if required by your state. If you have employees, you have to have coverage. If you have subcontractors, either YOU or THEY have to have coverage. Only sole practitioners are exempt from having WC -- even many space renters have to have the coverage as they are not true, independent businesses from the space the rent.
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