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Are independent contractors considered employees?

On Behalf of | Dec 17, 2012 | Family and Medical Leave Act |

Many companies hire out for independent contractors in order to supplement their workforce and assume that all legal obligations and benefits are dealt with through and by the staffing company which provides them. What they don’t realize is that when it comes to certain benefits, the relational status between the staffing company, employer, and independent contractor can sometimes blur the lines that define who is on the hook and to what extent.

When it comes to the Family and Medical Leave Act and the benefits that go along with it, the answer regarding who has obligations to the independent contractor and to what extent is a typical one in the legal community – it depends.

It may be that the staffing company is considered the actual employer under the FMLA, or that because of the company’s relationship to the independent contractor and staffing company, and the way they three interact, the company and the staffing company may be considered ‘joint employers.’ There are many tests that the court has used in determining whether or not an individual is considered to be an independent contractor or actual employee under the FMLA. None of these is clear cut and each measures a multitude of factors.

In weighing who has what obligations, the courts will consider aspects of the relationship such as who can fire the individual, which company pays the wages and provides health benefits, and who has control over the type of work and hours of work that individual performs? All facts and circumstances will be considered and weighed when determining responsibility under the FMLA.

Due to the complex relationship of independent contractors, their staffing company, and an employer, it is most likely the case that under the FMLA, a status of ‘joint employer’ exists. Some courts have even found that this is always the case when a staffing company provides employees to another company. Even if the staffing company is found to be the ‘primary’ employer, the company who uses the independent contractor’s services may still have responsibilities under the FMLA.

To ensure workers understand their legal rights as independent contractors, it is always a good idea to consult with an attorney experienced in employment law. Additionally, employers who use staffing firms and contractors would be wise to ensure they understand their legal obligations under particular contractual agreements.

Source: Human Resource Executive Online, “Do Employers Have FMLA Obligations to Independent Contractors?,” Keisha-Ann G. Gray, Dec. 13, 2012