Employment Contract Lawyer in Florida

Protecting You from Legal Action

Attorney L. Reed Bloodworth, Founder and CEO of Bloodworth Law, discusses five ways to determine independent contractor classification in Florida.

This seems obvious, but you’d be shocked at how often it doesn’t happen: If you want to call somebody a contractor, you have a written contract with them.

Contractor Needs a Written Contract

There are many, quote, “independent contractors” out there without a written contract. Not having a contract with a contractor is about the most reckless thing you could do.

A person that you retain to provide services to your business can be retained as an employee, or they can be retained as a contractor, but there are rules about what the effect of that is.

Employees Get Discrimination and Harassment Protection

For example, employees are protected from discrimination and harassment.

Contractors are not.

Employee Pay and Overtime Requirements

Employees have certain requirements with respect to minimum wage and overtime.

Contractors do not.

Workers’ Compensation is Different

Employees have to be covered by workers’ compensation policy.

Contractors do not receive it.

Can’t Be Independent Contractor If…

An employer’s default desire is always going to be to classify someone as an independent contractor. To prevent that from happening, there are various laws that say that if this person does not meet certain requirements, you may not classify them as an independent contractor.

So if I hire an IT consultant to come into my business, and my IT consultant has his own LLC, and he works for 17 different companies, there are lots of different clients of which we are but one.

The IT guy is in business for himself, doing his own work, being an IT entrepreneur. He is properly classified as an independent contractor with respect to my firm. But there are situations where that could be a lot more disputed.

You Might Not Be a Contractor If…

You might not be a contractor if, for example, a dog trainer who works for a company is classified as an independent contractor but has no written contract. She works only for one company, she has to wear the business uniform. She works established hours, sometimes works 12-hour days, and she is paid a daily rate of $180.

Not a Contractor If:

• No written contract
• Works for one firm
• Work set hours
• Wears business uniform
• Works 12-hour days

This could become a situation where the person should have been classified as an employee, and as a result, for those 12-hour days worked, was entitled to overtime compensation for the extra four hours worked.

Employers May Be Liable For Additional OT

As an employer, you want to make sure that those delineations are correct between employee and contractor. Because if you screw it up, you’re liable for all the additional overtime. Let alone if the employee is bitten by a dog.

Regular Attorney Consultations

Consider holding regular consultations with an employment attorney to review your existing contractor policies and new rules put in place by your HR staff for your employees. This step can ensure you’re in compliance with Florida employment law.

Five Ways to Clarify Employee vs Contractor Classifications

Attorney L. Reed Bloodworth is a managing partner of Bloodworth Law, with offices in Orlando and Winter Haven, Florida. Reed explains 5 ways to clarify between an employee and a contractor.

Written Contract

Number One is to have an actual written contract with your independent contractors.

Legally, a contract can be oral. So there’s no rule that says, as a bright line, that if there’s no written agreement, you can’t be an independent contractor. That’s not what the law says.

What the law says is one of the things that helps prove that someone is legitimately an independent contractor, is if that contract is in writing, as opposed to being verbal. So it’s better to have it in writing.

Contract Clearly Defines Scope of Work

The Second Thing is to make sure that the scope of work is clearly defined in that contract in as much detail as possible. And the most important factor in that scope of work is who is in control of the time, the place, and the manner of performing that work?

So make sure that the scope of work and the time, place, and manner in which the work is being performed are clearly set forth in the contract and that the contractor, not the company retaining them, has control over those factors to the extent possible.

The more control the contractor has over those factors, the more likely it is that that contractor is legitimately classified as an independent contractor and not an employee.

Review Government Policies

The Third Thing is to review those classifications with the latest Department of Labor and IRS guidance on a regular basis.

The standards for what is and is not an employee is technically different, depending on what law you’re looking at:

• What constitutes an employee for workers’ comp purposes?
• What constitutes an employee for the purposes of minimum wage and overtime?
• What constitutes an employee for the purposes of harassment and discrimination? And,
• What constitutes an employee for the purposes of the Internal Revenue Code?

They are all different standards, but they are very, very close to one another.

Looking at guidance from any of those different sources is useful for helping make sure that you’ve shored it up with all of those.

IRS and Department of Labor

The IRS, in particular, has a very detailed questionnaire that you can use as a worksheet to figure out if someone is properly classified or not, and so that’s a great place to start.

The Department of Labor also provides some guidance on that.

Reviewing these policies and what they do and reviewing your personnel and how they’re controlled is a very good way to ensure your business is properly classifying its employees and independent contractors. Also important is to do this review regularly, not just on the front end.

Employees Work Indefinitely

If you have a written contract, it’s not something that’s going to last forever. It has an end date, and that is one of the factors. If somebody is retained for a year, say, as opposed to indefinitely, that is more indicative of a contractor.

So, if it’s an annual contract, which it probably should be, or something that’s periodically renewed, then that’s a good time to review the guidance from the IRS and the Department of Labor to make sure that that classification is still valid.

Consult Professionals

Fourth, work with both an attorney and an accountant.

The accountant is more likely to be up to speed on IRS issues, and the attorney is more likely to be up to speed on the other employment statute issues.

So for any special cases, you can save yourself a lot of trouble if you just ask for advice on the front end, as opposed to asking for advice after you get served with a lawsuit, which will cost many thousands of dollars.

In addition, if you’ve got the advice of an attorney and/or an accountant on the front end and followed that advice in making your decision to classify someone, that could help you save money even if you were wrong because showing that level of effort to do it right helps reduce your damages in the event of a lawsuit.

Hire as an Employee

Finally, Number Five is: When in doubt, just hire them as employees. It’s not worth the risk.

Legal consultations with an employment attorney to review your employee policies and independent contractor contracts can ensure that you’re in compliance with Florida employment laws.

Bloodworth Law serves as legal counsel for Florida businesses of all sizes across the state. Our Employment Law Team can work with you remotely, via Zoom, or in the office with the appropriate safety measures taken to protect you as we help you with your legal issues.