Friday, October 5th, 2007...5:41 am
Independent Contractor v. Employee
Employers are sometimes tempted to characterize employees as “independent contractors,” hoping thereby to avoid certain tax obligations. Several years ago, Microsoft came out on the losing end when its “ICs” successfully sued to recover pension benefits. Vizcaino v. Microsoft Corp., 120 F.3d 1006 (9th Cir. 1997)(en banc). More recently, FedEx “ICs” in California have recovered work-related expenses under a state statute protecting common law employees. In Alaska, a driver working for another company has sued a related FedEx company, alleging that he was actually a FedEx employee. See Williams v. FedEx Ground Package Systems Inc., 3:05-cv-00192-TMB (D.Alaska).
Now Senators Obama and Durbin have introduced legislation to address the issue - the Independent Contractor Proper Classification Act of 2007 (S. 2004). The bill emphasizes the recovery of tax revenue, but, if passed, might set criteria applicable to wage & hour issues. H/T: California Employment Law.
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