Independent Contractor Lawyers Based in Miami-Dade County
Independent contractors serve a valuable purpose for many companies. However, misclassifying an individual as an independent contractor (as opposed to an employee) can have significant consequences. To complicate the situation further, Florida common law and various statutes have different definitions of an independent contractor.
For example, under the Fair Labor Standards Act, courts look at the “economic reality” to determine whether the individual is an employee or independent contractor. The U.S. Supreme Court has made clear that the “totality of the circumstances” dictate the relationship between the parties. The Supreme Court identified several factors which guide the analysis. For example,
- The permanency of the relationship
- The nature and degree of control
- The alleged contractor’s opportunity for profit and loss
- The degree of independence
- The existence of an employment or independent contractor agreement
In January 2019, the National Labor Relations Board (the “Board”) readopted the traditional common law test to determine whether it is an employment or independent contractor relationship. In the case SuperShuttle DFW, Inc., the Board evaluated, among other factors, the method of compensation, control over setting work schedules, the opportunity for significant economic gain, the absence of supervision, and the parties’ understanding of the relationship, to find that the franchisees at question were independent contractors. The Board’s decision overturned the Board’s 2014 decision in FedEx Home Delivery.
The Internal Revenue Service, for example, focuses on the level of control and independence.
The Florida Department of Revenue has identified 10 factors for determining whether an individual is an employee or independent contractor. For example, the Department of Revenue looks at factors such as:
- The amount of control the employer has over the worker
- Whether the work being performed is typically done under the direction of an employer
- The skill needed for the particular occupation
- Whether the employer supplies the required tools and equipment
- The length of the relationship
- The method of payment
- Whether the work is part of the regular business of the employer
- The intent of the parties which is sometimes reflected in a written agreement
- Whether the hiring party is a business
In Florida, the intentional misclassification of a worker is a felony. Additionally, there could be tax consequences by misclassifying a worker. If the Department of Revenue investigates an employer, the employer is generally required to complete an Independent Contractor Analysis (Form RTS-6061) which contains a number of questions designed to determine the relationship between the worker and the employer. If the Department of Revenue makes an adverse finding, the consequences could be significant.
To help navigate this minefield, contact an experienced attorney at BT Law Group who can explain the laws, prepare a comprehensive independent contractor agreement, defend against a claim of misclassification, or file a lawsuit on behalf of an employee who was improperly classified as an independent contractor.