Independent Contractors: Taxation and Liability - Most Common Issues

With almost one in ten people still jobless in the U. S. , many unemployed workers are turning to independent contractor work, bringing new opportunities - and challenges - to American workplaces.
These alternative arrangements offer both employers and contractors added flexibility and oftentimes financial benefits they couldn't derive through traditional employer-employee relationships. But they also bring some challenges that need to be addressed in order to protect both parties. The majority of those issues center on taxation and liability.
Employers must withhold income taxes on employees' compensation and pay 50 percent of the employees' payroll taxes. Independent contractors pay their own income tax and 100 percent of their payroll taxes. If a person fails to pay these taxes, the Internal Revenue Service will seek payment from the business if they perceive the person to be an employee. But if it's clear that the worker is an independent contractor, the business can't be held responsible.
Likewise, businesses may be liable for the actions of employees when acting on behalf of employers; whereas independent contractors are liable for their own actions. That means if someone causes injury or property damage on the job and he or she is your employee, your business can be held liable and the injured party can seek reimbursement or damages from you and your insurance company.
But if that person is an independent contractor, he or she - and his or her insurance company - will be responsible for damages.
Further, if an employee is injured on the job, the company may be responsible for any worker's compensation claims as a result of the injury. That's not the case if the worker is an independent contractor.
Clearly, it's important to understand the differences between employees and independent contractors, and respect the delineation. The IRS and courts primarily look at three factors when distinguishing the difference: behavior, finances and nature of relationship.
Workers are more likely to be viewed as independent contractors when they have

• a separate business entity such as a corporation;
• a written contract with the company that defines the relationship (not an employment agreement); and
• other accounts in addition to the subject company.
• Conversely, workers are more likely to be viewed as employees when the company
• requires the worker comply with instructions about when, where and how the work is to be performed;
• the company provides training for the worker;
• the company requires the worker to perform services personally as opposed to subcontracting labor; and
• the company provides compensation or benefits that look like those of an employee's.

When you consider hiring someone, it's safest to decide up front whether that person will be an employee or an independent contractor based upon the true nature of his or her relationship with your company. Then stick with that decision.

Robert P. Smyth is an attorney with Johns, Flaherty & Collins, SC, ( http://www.johnsflaherty.com/ ), a full-service law firm based in La Crosse, Wis. According to the Martindale-Hubbell Law Directory, Johns, Flaherty & Collins, SC, has more top-rated lawyers than any other La Crosse law firm.

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Understand The Difference Between An Injury Eligible for Workers Compensation Vs Disability

When you file a workers compensation claim you often make the assumption that you have been hurt while performing your duties at work. This is true and not to be confused with a disability claim that happens when you an injury occurring outside of work makes it impossible for you to do your job.
Disability insurance is designed to cover an injury that is considered short term or long term. Disability insurance is not something that is held by your employer. It is most typically part of your health benefits. Disability will pay you a portion of your regular pay for the time that you are out sick or injured. Once you get better the payments stop and you go back to work.
Disability is also commonly used to give new mothers time off from work after the birth of a baby. The insurance gives the mom partial compensation while they recover from birth and adapt to their new family.
The physical location of the injury as well as how it was caused is the major deciding factor between disability and workers compensation. However there are some other things to consider. Sometimes, a major injury occurs and although it happens outside the workplace it could happen as a result of a minor work injury that occurred earlier. At the time of the injury it may not require major medical treatment. Perhaps a visit to the doctor or chiropractor and the injury heals without the employee missing work. However the injury may leave you more likely to suffer from that kind of injury again or to further aggravate the old injury. If a month later your back is injured outside the work place, it is possible that the new injury still falls under workers compensation and not disability despite the location.
This gray area makes it vital that you visit your physician immediately after suffering from an injury at work. You also need to report it to your employer so that the incident can be properly documented.
These details make it so important to hire a work injury attorney to protect your rights as an injured worker. Disability is only a fraction of your pay. If your injury entitles you to full pay under workers compensation you would want to go with that option.
Speaking with a qualified attorney about your workers compensation claim can help you better understand the process as you work to get the compensation you deserve.

At the Law Offices of Dworkin & Maciariello we specialize in Illinois workers compensation cases. Speak with a Chicago workers compensation lawyer and learn how you are protected under the workmans comp laws in Illinois. Suffering from an injury at work can be stressful. Working with an Illinois work injury lawyers can help you get through and get you the compensation you deserve.

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Work Related Accidents: How the Law Impacts a Workplace Environment

When it comes to workers who have sustained injuries as a result of an on-the-job accident, injury, or occupational disease, there are several things they can do to increase the chances of successfully proving liability. First, it's important to find an attorney that is experienced in handling work related accidents and the injuries associated with them. They will assist you in preserving any evidence related to the case that will also prove useful to ensuring proper justice.
Employer Responsibility
Although the law is always subject to changes and new interpretations, there are legal processes that help ensure the liable party is held accountable in work related accident cases. It's required, by law, that every employer must report serious work-related accidents, diseases and dangerous incidents to the Health Safety Executive (HSE). Your employer has to follow certain guidelines and carry out a risk assessment to best take care of the health and safety of employees and visitors. This includes deciding how many first-aid personnel are needed, and what kind of first-aid equipment and facilities should be provided. First-aiders have no statutory right to extra pay, but some employers do offer this. Employees must also take reasonable care over their own health and safety.
Things that must be kept in mind while undergoing a dispute related to worker's compensation include: disability payments, returning to work after an injury, medical treatment, physician changes, vocational rehabilitation, and permanent partial disability benefits and will guide our client's towards the outcome they desire.
Recording Accidents
Any injury at work - including minor injuries - should be recorded in your employer's 'accident book'. All employers (except for very small companies) must keep an accident book. It's mainly for the benefit of employees, as it provides a useful record of what happened in case you need time off work or need to claim compensation later on. But recording accidents also helps your employer to see what's going wrong and take action to stop accidents in future.
Making an Injury Claim
If you have been injured in an accident at work and you think your employer is at fault, you may want to make a claim for compensation. Any claim must be made within three years of the date of the accident, and you will normally need a lawyer to represent you. If you belong to a trade union, you may be able to use their legal services. Otherwise, you should speak to a specialist personal injury lawyer.
By law, your employer must be insured to cover a successful claim. Your employer should place a certificate with the name of their employer's insurance company where it can be seen at work. If not, they must give you the details if you need them.
If you are considering suing your employer, remember that the aim of legal damages is to put you in the position you would be in had the accident not happened - it's not about getting hold of some 'free' money.
Determining Liability
Worker's compensation laws prevent injured workers from filing personal injury lawsuits against their employers for certain work related accidents; so determining liability in those cases are unnecessary. However, if the accident occurred on the actual job site due to the negligence of a non-company related individual, then a possible claim could be filed against the third party. The third party could be more than just an individual, as it is often the designers and manufacturers of defective machines and equipment. Other third party examples that could be held liable include subcontractors, negligent drivers, property owners, maintenance companies or even safety consultants.

This article was written by Roger Brent Hatcher, an attorney at Smith, Gilliam, Williams & Miles, a leading Atlanta Law Firm since 1928.

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Employment and Support Allowance - Claims and Appeals - The View of a Professional

The quality of the medical assessments carried out on behalf of the Department of Work and Pensions (DWP) to determine entitlement to Employment & Support Allowance (ESA) still leaves much to be desired, based on the cases that I see.
To be eligible for ESA the applicant should pass 15 points threshold. Those that have been denied usually seek advice to appeal their case yet still fail. However, it is very seldom as far as my experience is concerned not to find the needed 15 points whenever I assist my clients in going through the test.
Although the decision still lies with the tribunal there are a few aspects which can be considered in improving the chances of approval. First, I deem that it is not advantageous to squeeze out every possible point instead I advise my client to be honest and be realistic when taking the test. It is also of great essence that I believe in the authenticity of my client. If on my part I already find even a hint of doubt, what more with the tribunal? It will also help if relevant medical evidence can be presented although securing them will need a combination of luck and skill. Further, it is worth going through the ESA50 enquiry form and the "health care professional" (HCP) report with the client. Analyze what the client wrote in his application with the HCP and what the remarks of the latter were. Finding factual inaccuracies and correcting it can be helpful in persuading the tribunal that they should reconsider the application.
Meanwhile, I find that majority of the clients who have scored nil points can pass the separate test to be placed in the "support group". If it gets approved, the client will be spared of "work-focused interviews" and other requirements to carry out "work-related activity" thus avoiding financial sanction. Actually being in the support group marks a financial advantage as opposed to "work related activity group" as the latter will only have 12 months entitlement effective April 2012. After which, they can avail means-tested benefits such as income related ESA, housing benefit or council tax benefit which they might not be able to qualify either if their spouse or they have other sources of income such as pension or other earnings.
My concern in most of the appeals is to move the case into a support group and it is quite gratifying when the decision maker will accept the medical evidence submitted by my client without the need for tribunal hearing.
At any rate, an element of luck can still be considered if the case is recommended to be place in front of the tribunal where it will be heard by 2 panels comprising a judge and a doctor. As the tribunal is also human, both may have a different approach to the evidence presented to them. Some members may be more even-handed than others and the chance of a favourable outcome increases. On the other hand, some may struggle with "giving benefit of the doubt" and this can consequently affect the outcome of the case.
Since I always attend hearings, I've noticed that some representatives prefer to just make a submission before the tribunal. This may help as it is possible to irritate the tribunal easily if the representative speaks too much. But based on my experience, I prefer not to send submission. Judges usually ask question not presented to them in writing and answers to which should be as specific and detailed to convince them totally. I don't believe in "trying it on" and recommend claims. Instead, I pursue appeals which I believe have merit.

If you would like professional esa tribunal representation at competitive rates, then contact South Wales Disability Matters now.

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Constitutional Limitations on Labour Laws

Although labour policy seeks to create high minimum standards of employment, the choice of the legislature in seeking to achieve the objective are not unqualified. Minimum standard legislation is subject to various limitations. To begin with, in order to guarantee the fundamental rights, the Indian Constitution imposes certain limitations on the legislations on the legislature and the executive. To the extent it is inconsistent with or derogatory to a fundamental right, the legislation is void. Fundamental rights are enforceable by the courts under Article 32 and 226.
The fundamental rights are enumerated in Part-III of the Constitution. The whole object of Part-III is to provide protection for the freedom and rights mentioned therein against arbitrary actions by the State. Of particular relevance is Article 14, which provides that "the State shall not deny to any person equality before the law or equal protection of the laws within the territory of India". In addition to this, Article 16 guarantees equality of opportunity in matters public employment. Further, Article 19 guarantees "the right to freedom of speech and expression, to assemble peaceably and without arms, to form associations or unions to practice any profession, and to carry on any occupation, trade or business." These constitutional guarantees are of great practical significance in the area of labour law, including minimum standard legislation. Equal protection constitutes a limitation on the legislative power to select or decide which business or industry must achieve minimum standards. The right to carry on trade profession or business limits the burden which the legislation may place on business in the interests of workers. The freedom of speech, assembly, association and unionisation protect workers in their efforts to achieve their objectives through self in organising, picketing or striking.
Article 21, provide protection of life and personal liberty. It provides that no person shall be deprived of his life or personal liberty except according to procedure established by law. Article 23, prohibits traffic in human beings and forced labour. It says (i) Traffic in human beings and beggar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law. Life, in Article 21, has been interpreted by the Supreme Court as including Livelihood and the Court has held in several cases that any employment below minimum wage levels is impermissible as it accounts to slavery as understood in Article23. Holding a person in bondage is a Constitutional crime. Article 24, places a ban on employment below the age of 14 in any factory or mine or engaged in any other hazardous employment.


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Municipal Pension Holders at Risk As Chapter 9 Bankruptcy Filings Increase

Jefferson County, Alabama filed the biggest Chapter 9 bankruptcy in United States history on November 9, 2011. The $4 billion filing covering the city of Birmingham and 658,000 county residents far surpassed Orange County, California, the previous record holder, which filed for Chapter 9 bankruptcy in 1994 with $1.7 in debt.
The filing raises issues about a local government's inherent obligation and guarantee to pay its creditors on time. As a result of filing Chapter 9, Jefferson County was relieved at least temporarily from paying most debt obligations and in fact stopped paying general debt holders. This situation raises a new and grave concern for public employees, mainly whether their pensions are safe from Chapter 9 bankruptcy.
The purpose of Chapter 9 is to provide a financially distressed municipality with protection from its creditors while it develops and negotiates a plan for adjusting its debts.
Underfunded pension plans for firefighters, teachers, police, and other municipal employees are increasingly a major consideration in a municipality's ability to repay its debt. Pensions are considered to be underfunded when the accrued liabilities of the plan exceed the actuarial value of the plan's assets.
Nationwide, the Pew Center on the States estimates a $1.26 trillion funding gap, as of 2009, between the promises states have made for public employees' retirement benefits and the money set aside to pay for them. The situation is much worse for retiree health care benefits, since states have saved only about $31 billion, or 5 percent, toward these obligations. As is true for the private sector, public employee retiree health benefits are "pay as you go" obligations of the employer.
Municipal plan sponsors may take various steps to reduce this unfunded liability going forward without requiring immediate additional employer contributions to the plan. Ultimately, however, if the plan does not have sufficient funds to fund pension benefits for current retirees, then the municipal plan sponsor will have to raise revenues, cut spending, or face a default on its obligations to retired employees. Because Chapter 9 has been used so rarely, there are many unanswered questions about what can and cannot be achieved in a Chapter 9 bankruptcy.
(Realizing the financial risk inherent in unfunded pension liabilities, many municipalities are moving as quickly as possible to adopt 401(k)-type defined contribution plans in place of traditional defined benefit plans that obligate the municipality to these high future payments.)
Chapter 9 offers a potentially powerful mechanism to assist municipalities in obtaining relief from creditors and adjusting their debts. The commencement of a Chapter 9 bankruptcy case operates as a stay, applicable to all creditors, of most efforts to collect prepetition claims, including attempts to gain possession of property or enforce contractual rights.
Some jurisdictions view public employee retirement benefits as a property interest and some view them as contractual rights, both of which may be constitutionally protected. Accordingly, while the automatic stay is in effect, a municipal debtor may assert that it cannot be compelled to honor its obligations to retirees. Finally, the stay may require that pensioners assert their rights in the bankruptcy forum, which often is perceived as more "debtor friendly."
In the Chapter 9 bankruptcy case commenced by the City of Prichard, Alabama, in October 2009, the stay initially prohibited the pensioners from prosecuting their preexisting lawsuit that sought, among other things, to hold certain of the City's officials liable for breach of fiduciary duty for the poor financial performance of the City's pension fund.
In the Chapter 9 case involving the City of Vallejo, California, the automatic stay allowed the City to reduce retiree health benefits. One of the City's arguments was that retirees had no vested rights in the health benefits since they were negotiated as part of a collective bargaining agreement.
While Chapter 9 is somewhat similar to Chapters 7 and 11, it is significantly different in that there is no provision for the liquidation of the assets of the municipality and distribution of the proceeds to creditors.
Of course, not all municipalities have the opportunity to avoid their pension obligations. Many states require special authorization for a Chapter 9 filing. As a result, Chapter 9 will not be available to all municipalities in all states. Even where it is available, Chapter 9 does not provide municipalities with all of the bankruptcy tools that practitioners are familiar with in corporate bankruptcies. When bankruptcy is an alternative, Chapter 9 does not necessarily provide a struggling municipality full immunity from its pension obligations. However, very little experience exists in this area. As a result, how effective these bankruptcy tools will be in addressing a municipality's pension debt is far from clear.
January 2012

Mark Johnson, Ph.D., J.D., a highly experienced ERISA expert, is founder of ERISA Benefits Consulting Inc. http://www.erisa-benefits.com/ As a former ERISA Plan Managing Director and plan fiduciary for a Fortune 500 company, Dr. Johnson has practical knowledge of plan documents as well as an in-depth understanding of ERISA obligations. He works as an expert consultant and witness on 401(k), ESOP and pension fiduciary liability; retiree medical benefit coverage; third party administrator disputes; individual benefit claims; pension benefits in bankruptcy; long term disability benefits; and cash conversion balances. He can be reached at 817-909-0778. ERISA Benefits Consulting, Inc by Mark Johnson provides benefit consulting and advisory services and does not engage in the practice of law.

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Handling Racial Discrimination in the Workplace

Racial Discrimination is the Workplace is Common. Unfortunately, there are still individuals who have to deal with racial discrimination in the workplace. A study at Rutgers University in 2002 determined that workplace discrimination is a common phenomenon. Twenty eight per cent of African American workers have experienced discrimination in the workplace. This is compared to six percent of whites. Discrimination lawyers point out that of all the forms of discrimination, discrimination in the workplace is a particularly insidious. This is because of its ongoing nature and the mental and emotional toll it takes on the worker. It is much harder to walk away from or turn your back on racial discrimination when it exists in the workplace. When your livelihood is at stake, you are more likely to try to ignore the discrimination and suppress the negative feelings involved. This inevitably leads to anger and bitterness, which then inevitably leads to poorer job performance. Discrimination lawyers will tell you that while overt acts discrimination are usually more obvious and direct, workplace discrimination is often subtle, harder to detect and more challenging to deal with.
The Challenge of Coming Forward. You may know that you are being discriminated against, but proving it is an entirely different matter. It is unlikely that an employer will specifically admit to racial discrimination. The difficulty in proving it adds to the frustration, isolation, withdrawal, self-doubt and lack of self-confidence that you are already experiencing. The resulting stress can spill over into family relationships and other aspects of your life. All people, especially African Americans, want to appear strong and are hesitant to talk about such personal things with therapist and other strangers. Nevertheless, when your job and your life is being impacted in a negative way, employers have to take notice. One viable and effective solution is to talk to discrimination lawyers. Besides being able to determine if you have a legal claim against an employer, discrimination lawyers will have the resources to help you cope with the emotional stress created by racial bias in the workplace. These resources might include networking and support groups, professional organizations, therapy or counseling, and job coaching.
Rights of Employees in the Workplace. All employees enjoy certain basic rights in the workplace. Among these basic rights is freedom from discrimination. This freedom from discrimination is even before being hired. As a job candidate and applicant, you have certain rights. In addition to race, you have the right to be free from discrimination because of age, sex, ethnic or national origin and religion. If you feel you have been discriminated against in the workplace, contact discrimination lawyers to schedule a consultation.

If you found this article helpful and would like to learn more about racial discrimination contact a New York employment attorney to better understand your rights.

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