An independent contractor is a person who works for a company, under a contract on a case by case basis, but is not considered to be an employee of the company. Some of the reasons why a person might choose to work as a contractor include, but may not be limited to:
- Control over where and how they work;
- Control over how work tasks are to be performed;
- No taxes are withheld from their paycheck;
- Greater flexibility in terms of working hours; and
- Control and flexibility in terms of what work projects are accepted.
However, there are some considerations that may dissuade someone from working as an independent contract:
- Insurance and health benefits must be paid for entirely independently;
- The contractor is responsible for all taxes resulting from contracted income;
- The contractor is solely responsible for any injuries resulting from a job, as in they cannot claim worker’s comp; and
- Fewer protections against workplace discrimination are available.
Generally speaking, an independent contractor is not eligible to receive worker’s compensation benefits. However, there may be some exceptions depending on state law, as well as the terms of employment and when the contractor has been hired to do work that is considered to be especially risky or inherently dangerous.
An independent contractor owns all of their own work, whereas an employer generally owns their employee’s work. What this means is that the independent contractor will generally possess ownership rights to any work that they have created. An exception to this would be if the contractor and the employer have signed a written agreement, stating that the employer is the owner of any and all works created by the contractor for that specific job.
What Is a Contract Job? What Are Some Examples of Contract Jobs?
A contract job is a specific type of temporary employment, which is generally created for the purpose of accomplishing a specific business goal. These jobs are fulfilled by independent contractors who are paid a set amount of money, either in a lump sum or in regular installments.
Contract jobs may also be filled through the use of a temporary agency. An employer would contact the agency who then supplies the business with qualified candidates applying for the position or job as temporary workers. The workers may then form a contract that is specific to the position or job.
The most notable difference between regular, employment contract jobs and temporary contract jobs would be the duration of employment. Contract jobs tend to be temporary, and are terminated once the predetermined business goal has reached completion. Regular employment as stated in a contract may continue for an indefinite amount of time.
Some of the most common examples of contract jobs include:
- Construction or building projects, such as property building projects that may require several years of work to complete;
- Quick cleanup or setup;
- Various task specific committees, such as distributing company material, advertising, and marketing;
- Freelance writing; and
- Seasonal jobs, such as summer camp workers or Halloween supply store employees.
What Are Some Of the Most Common Contract Job Disputes?
It is not uncommon for disputes associated with contract jobs to occur. One of the most common contract job disputes is related to whether a person is actually an independent contractor. It is imperative to determine early on whether a worker is classified as an employee, or as an independent contractor, in order to avoid as many disputes as possible.
Most labor and employment laws do not apply to independent contractors; determining a person’s employment status is instrumental in ensuring their rights are not being violated. One way to determine a person’s employment status is to examine how they are being paid for the work they complete. If they are on the business’s payroll and are consistently receiving paychecks, it is likely that they would be classified as an employee, and not as an independent contractor.
Some other examples of the most common contract job disputes include:
- The quality of work being rendered;
- Who has control over the work project, meaning the contractor or the employer;
- Assignment and delegation of contract duties to a third party;
- Which type of employment benefits, if any, that the worker is entitled to;
- Sharing of profits;
- Risk of loss; and
- Which party could be held liable for various criminal violations or civil tort claims.
How Are Contract Job Disputes Remedied?
Generally speaking, remedies for disputes related to contract jobs mirror those for breach of contract disputes. Breach of contract occurs when one party to the contract violates the terms of said contract, and the other party is affected by these actions.
Remedies are most commonly categorized as being either legal or equitable remedies. Legal remedies allow the nonbreaching party to recover compensatory damages, meaning money damages. Equitable remedies are court-prescribed actions, and are most commonly used to solve a substantial breach when compensatory damages could be considered insufficient.
The three most common equitable remedies disbursed in a breach of contract case include:
Remedies for contract job disputes specifically will usually consist of a monetary damages award for any losses that are caused because of the dispute. An example of this would be loss of profits, or missing payment amounts. Depending on the circumstances, the court may allow the disputing parties to rewrite the contract if there are any unclear terms in the document.
The court may also order an injunction against the party who is responsible for breaching the contract. An injunction is a specific court order which forces the breaching party to either take a specific action, or refrain from continuing an action. An example of this would be how, although a court will generally refrain from ordering a party to finish a job, they could issue an injunction preventing that party from seeking out employment at companies that would be considered competitors for their original employer.
What Else Should I Know About Independent Contracting?
As previously discussed, many disputes associated with independent contracting can be avoided by determining the worker’s employment status. Some other factors that would designate a worker as an independent contractor instead of an employee would be:
- The worker themselves provides all of the equipment needed to complete the job;
- The contractor may be dismissed, without due process, at any time;
- The contractor may choose, at any time, whether to return to work without fear of having their employment terminated; and
- The worker controls their working hours.
Employers cannot classify a worker as an independent contractor in order to avoid paying benefits. Misclassifying an employee can result in the employer being penalized. The United States Department of Labor, as well as the Internal Revenue Service, perform regular audits of companies to prevent these expense avoidance tactics.
Because employment and labor laws do not apply to independent contractors, the companies that hire them are not required to withhold any taxes, Medicare, or Social Security from the wages they pay the contractor.
Do I Need an Attorney For Help With Contract Job Disputes?
Whether you are an employer or an independent contractor, you should consult with an experienced and local contract lawyer if any issues arise associated with a contract job.
State laws on contract work can vary widely, so it is recommended that you work with a local attorney to ensure that you receive the most relevant legal advice. An attorney can answer any questions that you may have, provide you with legal advice, and can also represent you in court, as needed.