Your role is to decide if Karen is an independent contractor or an employee and discuss some of the preventative and ethical situations that are occurring in this case.
1. Do you feel that Karen is an independent contractor or an employee? What is your rationale for this decision?
I went back in forth on the answer on this one. There were clues to me that could point to both. I finally decided to go with an independent contractor. The reason for this is that for one Karen was never hired by ABC Utility. Karen was hired as Human Resources Temporary, even though her title was changed, it does not signify that she became an employee. Her title was just changed during the time of Karen completing additional projects for the company due to Cynthia being impressed with her work on Karen’s original project. Her name was changed to a Consultant, which often a contracted job. Karen is a self-regulating contractor.
2. What factors do you feel help contribute to Karen being an employee?
One factor that point towards an employee is the fact that Karen has been with the utility for over five years. Typically, an independent contractor does not stay with a company for that long. An employee stays at a company that long. An employee also makes a monthly salary, which is more consistent with an employee than an independent contractor. Since Cynthia changed Karen’s title so she was similar to the others in her department who did a similar job as Karen, points to Karen not having full control over her performance. This points towards being an employee.
What factors favor her being a contractor?
Karen has other clients through the five years, one that still has on retainer. Karen also has a contract with the company. Typically, employees don’t have “contracts”. Also, employees receive a w-2 tax form, contractors receive 1099 forms, which is what Karen receives.
What are some potential legal implications in the...