“Employee” or “Independent Contractor” - Labels Matter
Saturday, April 11th, 2009“Employee,” “independent contractor,” “consultant.” In the area of employee benefits, labels matter.
I represented a worker this week pursuing unemployment compensation benefits. He had worked for years as an employment recruiter. He was laid off by his employer and he began to collect unemployment compensation. He put his resume out on Monster, and similar sites.
Then he was approached by a temporary agency that wanted to place him with another company to perform recruitment services. He accepted the offer and worked in the new position. He worked there for many months and was laid off again.
He sought to reopen his claim. THE PROBLEM – his contract with the last employer identified him as an independent contractor.
You can’t collect unemployment compensation benefits if the last work you performed was self-employment. Because of this interim self-employment, he was ruled ineligible for unemployment compensation benefits.
After reviewing the matter with him, it appeared that he was not “self-employed.” Rather, it appeared that he was an “employee” when the appropriate factors were considered. We appealed the denial of his claim and are awaiting a decision. I am confident his denial will be overturned.
Employment benefit systems like workers’ compensation and unemployment compensation require that the worker be separated from “employment” due to injury or reasons that are not the workers fault. Workers should be careful not to allow themselves to be called independent contractors when they are really employees.
Even if your employer does call you and “independent contractor” or a “consultant,” workers should consult a lawyer if they become disabled or unemployed. The label that was applied to the relationship by the parties may not be the label that the legal system applies after all the facts are considered.
