|July 1, 2010 | www.fisherphillips.com|
As businesses look for ways to save money without lowering productivity, the benefits of hiring an independent contractor can be appealing for several reasons. Businesses who hire the services of properly classified independent contractors avoid many of the monetary responsibilities that attach to hiring employees: worker's compensation insurance, employment tax, and wage withholding responsibilities, amongst others.
Earlier this year, a federal appeals court ruled in favor of Hyundai Motor Manufacturing Alabama, LLC (HMMA) in a case brought under the Uniformed Services Employment and Re-Employment Rights Act of 1994 (USERRA).
Assuming that there is a valid and enforceable past practice which meets the criteria above, such ways of doing things need not last forever.
When classifying their employees for overtime purposes under federal and state wage-hour laws, employers often rely on the equivalent of the "Duck Test": the job's title sounds professional and its duties require expertise and a high degree of skill – it sounds and looks like a professional job, and so it must qualify for the professional exemption even if most of its occupants lack advanced degrees.