Question

The purpose of this assignment is to identify laws and federal regulations governing employment.

Consider what you have learned about employment laws and federal regulations governing employment, particularly regarding the distinctions between independent contractors and employees and how business is conducted with each. Read the scenario below.

Scenario

Madrid and Berne is a top-rated accounting firm with offices in Phoenix and Tucson. Madrid and Berne wanted to provide bookkeeping as an additional service to its clients. It hired Joan Newman Business Services, with offices in Phoenix, Flagstaff, Tucson, and Yuma, to perform contract bookkeeping services for Madrid and Berne clients who requested and needed such services. Madrid and Berne entered into an independent contractor agreement with Joan Newman Business Services. The contract stated that Joan Newman is an independent contractor and agrees that her business is an independent contractor of Madrid and Berne.

After entering into the agreement, Joan worked solely on jobs assigned by Madrid and Berne and was paid a commission for the work. The commission was based upon the fees determined by Madrid and Berne and paid by the clients to Madrid and Berne. Joan was paid on a weekly basis. She used available and unused office space at Madrid and Berne, along with Madrid and Berne's equipment and supplies. This arrangement made it easier for clients to utilize Joan's services and be familiar with the offices. Madrid and Berne reviewed Joan's work and returned faulty work to her for corrections before delivering the completed work to the clients.

Assignment

In a 500-750 word paper, apply what you have learned about the distinctions between employees and independent contractors to the scenario by discussing the following.

1. Provide an explanation of why it is important to know the distinctions between employees and independent contractors when operating a business.
2. Discuss the key factors for determining Joan's employee classification using the concepts that have been presented so far in the course and your own research relevant to the scenario.
3. Using the rules for distinguishing between employee and independent contractor, discuss whether Joan's designation as an independent contractor was correct, and justify your designation by citing laws and federal regulations.

Answer 1

I feel that it is mandatory to know the distinction between employees and independent contractor. The main reason is that being an employee or independent contractor, it is important to know about the work designated to him. He must have an idea about the work he must perform. Understanding his exact role clearly in the organization, he can recognize whether the work designated to him is fair or not. Here an employee means a single worker or a collective group of workers. An independent contract means that a company or a organization like Joan's Newman Business comes into an agreement with a company that they will work with them. He can work with many clients unlike the employee who must work for the same organization for several years. An independent contractor can receive commission like he did in the above scenario. So there are a lot of advantages when compared to be a employee. Just like we above saw, it is relatively easy for people to utilize Joan's services and also to be familiar with their offices. Madrid and Berne really has an advantage here, because they not only provide book keeping to its customers but also provide something the competition does not provide. So we can clearly see why is it important to know the difference between independent contractor and employee as it makes the delegation of work easier from their point of view as they know what to do and how to do it.

The most relevant key factors that determine Joan's classification includes; hours of work, training, integration of services,type of work,availability of services and payments etc.

Hours of work:

In case of the independent contractor, he has an established set of hours he must work when gets into a contract with a company. So he may not work just like a standard employee. So the hours of work he does is a key factor that distinguishes him.

Training:

Training of the the independent contractor is done by well experienced higher officials so that they get the best exposure to their designated work.

Integration of services:

His integration to the firm he is contracted with actually shows that he is subject to control and direction. He has few rights which the employee never has.

Type of work:

He can adopt between part time and full time works. The contract between the independent contractor and the organization contains the type and hours of work he is contracted with

Availability of services:

The nature and availability of services which are performed by the independent contractor usually indicates his statues as an independent contractor.

Payments:

Usually when regular payments made  on day, month and year then there is a natural relationship between the employer and employee. Contractors like these receive commission which again indicates that they are independent contractor.

Thus these are some key factors that discuss about the key factors which determine that he is an independent worker.

The employee is employed by the employer for a work of regular basis whereas the independent contractor is a self employed person who works for the organization for some compensation. Then the employee's source of income is salary whereas the independent contractors receives remuneration for his services from the projects. The employee works for a specific organization whereas the independent contractor can have many clients.The employee's tend to work for longer and they have better relationship with employer and the independent worker works for as very short period. S these are some key distinctive factors between the independent contractor and an employee.

For the commission and client tale he has i would say that his contract with this firm was a very good one. They are also benefited by the firm and at the same time they get their advantage of providing services to the public. Joan's contract is getting a very efficient tool for him to actually expand his profit. Thus this turns out that Joan's designation as an independent worker is correct.