BRC Partners is a consulting firm. Sam and Arnie are analysts for BRC. Sam was hired as an employee and Arnie was hired as an independent contractor. They both work in the same BRC office under the same supervisor. They both must work Monday through Friday during standard business hours. Both are required to report to weekly staff meetings. Sam is paid a salary and the proper federal and state tax witholdings are made. Arnie does not receive benefits like retirement and health insurance and he is paid by the project with no federal and state withholdings. Arnie signed a contract that clearly stated he was an independent contractor and not an employee.

Question

Quizplus · Accepted Answer

Arnie does not meet the criteria for classification as an independent contractor because he is under the same supervisor as an employee, has the same work schedule, and is not autonomous in his work. BRC may be liable for misclassifying Arnie and could face penalties for failing to pay taxes and benefits owed to him. Arnie may also be able to sue for benefits and compensation he would have received if properly classified as an employee. The fact that Arnie signed a contract stating he was an independent contractor does not absolve BRC of liability if it is determined that he actually should have been classified as an employee.

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