Karen can be considered an employee. Logical reason behind this belief is the fact that Karen was paid fixed salary every month for last five years. As the text book mentions “Employees are usually paid at fixed intervals” and “ICs are generally paid for their results, not the amount of time worked” (Source: Page 18, Employment law for Business). Since Karen was paid a fixed salary every month, this contributes to the characteristic of being an employee of the company. Karen has also been given a job title which was changed as per the employer’s requirement over the course of time. Her job title is consistent with other employees in the department. Karen does not seem to have control on her Job Title that reflects the “Behavioral Control” of an employee.
2. What factors do you feel help contribute to Karen being an employee?
The following factors help contribute to Karen being an employee:-
Karen is paid fixed salary of $10000 every month which is a characteristic of being an employee.
Karen has been assigned a job title that is consistent with other permanent employees of the department.
Her job title was changed as per company’s requirements that show Employer-employee relationship of two parties as well as behavioral control exercised by company on Karen regarding her job title.
Karen had been working at Utility for 5 years that implies that she had been using company’s facility and tools to complete her project work.
3. What factors favor her being a contractor?
The following factors favor her being a contractor:
Karen received 1099 for last 5 years for her wages. She was not sent any W-2 from the company.
Karen also offered her services to other clients at the same time. An individual contractor offer services to multiple clients concurrently. She had one client with almost 40 hours project two years ago while she was working for Cynthia’s company.
Karen works on project by project basis and each project comes with a new contract.
Karen is not given any special instructions by company on how her work has to be performed.
4. What are some potential legal implications in the case? What should the utility do to rectify any wrongs in this situation?
Some of the legal implications in the case areas following:
When a person is defined as an employee, it gives that employee a right to pursue the claim.
Based on hours worked, employer might be liable to offer benefits to employee.
If person is defined as employee, employer might have to face the punishments…