Recruitment and selection law for local government employers - Page 351 |
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Chapter 9: Hiring Employees versus Engaging Independent Contractors | 335
hiring party can show damages resulting from the failure to complete the work as agreed.43
9.4 The Conclusion: Paradise County Has Three New Employees
In engaging the services of the sanitation worker, visiting nurse, and accounting clerk, Paradise County has taken on three new employees, notwithstanding how the county or the workers describe the relationship. Why is that the case? Because Paradise County has (1) retained the right to control the work of the sanitation worker, visiting nurse, and accounting clerk; (2) has the right to fire each of them; and (3) has not provided the workers with the opportunity to make a profit or suffer a loss.
The workers, for their part, (1) individually have made no investment in the performance of their services for the county and (2) do not seek out client opportunities on their own. Finally, with respect to each of the workers, (1) both Paradise County and the worker envision a continuing relationship, and (2) the work done is an integral part of the business of county government.
As a matter of law, the workers are employees, not independent contractors.
9.5 Some Difficult Cases
9.5.1 Positions Funded through Grants
Almost all North Carolina government employers—state agencies, local governments, community colleges, and four-year colleges—have positions whose salaries are funded through grants from federal or private sources. Because these positions are generally created outside of the organization’s usual classification and budgeting process, employers may be tempted to engage the workers as independent contractors. An IRS Revenue Ruling on the status of a professor and a clerical worker whose salaries were funded
43. See Rev. Rul. 70-309, 1970-1 C.B. 199 (oil-well pumpers can quit at any time); I.R.S. Priv. Ltr. Rul. 9320038 (Feb. 22, 1993) (department of corrections medical director who could be fired with 30-days’ notice and could quit at any time was employee); I.R.S. Priv. Ltr. Rul. 200339006 (June 9, 2003) (accounting tech who could quit without incurring liability or penalty was employee).
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| Title | Recruitment and selection law for local government employers - Page 351 |
| Full Text | Chapter 9: Hiring Employees versus Engaging Independent Contractors | 335 hiring party can show damages resulting from the failure to complete the work as agreed.43 9.4 The Conclusion: Paradise County Has Three New Employees In engaging the services of the sanitation worker, visiting nurse, and accounting clerk, Paradise County has taken on three new employees, notwithstanding how the county or the workers describe the relationship. Why is that the case? Because Paradise County has (1) retained the right to control the work of the sanitation worker, visiting nurse, and accounting clerk; (2) has the right to fire each of them; and (3) has not provided the workers with the opportunity to make a profit or suffer a loss. The workers, for their part, (1) individually have made no investment in the performance of their services for the county and (2) do not seek out client opportunities on their own. Finally, with respect to each of the workers, (1) both Paradise County and the worker envision a continuing relationship, and (2) the work done is an integral part of the business of county government. As a matter of law, the workers are employees, not independent contractors. 9.5 Some Difficult Cases 9.5.1 Positions Funded through Grants Almost all North Carolina government employers—state agencies, local governments, community colleges, and four-year colleges—have positions whose salaries are funded through grants from federal or private sources. Because these positions are generally created outside of the organization’s usual classification and budgeting process, employers may be tempted to engage the workers as independent contractors. An IRS Revenue Ruling on the status of a professor and a clerical worker whose salaries were funded 43. See Rev. Rul. 70-309, 1970-1 C.B. 199 (oil-well pumpers can quit at any time); I.R.S. Priv. Ltr. Rul. 9320038 (Feb. 22, 1993) (department of corrections medical director who could be fired with 30-days’ notice and could quit at any time was employee); I.R.S. Priv. Ltr. Rul. 200339006 (June 9, 2003) (accounting tech who could quit without incurring liability or penalty was employee). |
