When Washington DC Employers are Responsible for Independent Contract Actions
In most cases, an employer is not responsible for the illegal activities and actions of the independent contractors they work with. However, if specific conditions are present, like delegating tasks that should not be given to an independent contractor, or a direct connection to the activities, they could be held accountable. Business owners need to be constantly aware of situations that could expose them to liability, and therefore it’s important to make sure that you are not inadvertently putting the company at risk by mishandling independent contractors.
Don’t Misclassify Independent Contractors
One of the quickest ways to get in trouble with independent contractors is to misclassify them. It’s understandable that employers prefer to hire independent contractors over employees as it means they aren’t responsible for benefits. However, misclassifying someone can land your business in hot water. A failure to properly classify someone can also result in possible penalties. If you misclassify someone and wind up owing taxes, you could be penalized for the failure to pay taxes on the person that should have been an employee.
There are some situations where an employer might be liable for an independent contractor’s actions — primarily when there is a direct connection with other criminal or civil liabilities and penalties. This may involve anything from a negligent act to an omission committed by the independent contractor.
Liability doesn’t typically exist unless the job is inherently dangerous. One example is construction, where the independent contractor must perform their job with specific safety equipment. Some jobs may have an increased risk of injury despite safety items available. The riskier the situations are, the greater the chance that the company will be liable for any injury to the worker.
If you are unsure what inherently dangerous activity is, it can include handling hazardous materials, working with wild animals, or working with explosives. The need for someone with specialized experience is why many companies hire independent contractors.
Washington DC Unemployment Insurance Laws
Someone who is an independent contractor is not covered under the DC unemployment insurance law. In the event you misclassify an independent contractor, you would be liable to pay unemployment taxes on the employee’s wages. When determining whether someone is an independent contractor or employee, the Department of Employment Services looks at the following questions:
- How is the person being compensated?
- Who has the right to supervise how the intermediate work should be completed?
- Is the person who is providing the independent contractor services engaged in an independent occupation, business, trade, or profession?
What this means is that if you have misclassified someone and haven’t registered with the Department of Employment Services, and you are determined to be a liable employer and you will be responsible for back taxes, plus penalties and interest.
Contact a Washington DC Employment Lawyer
If you have questions on what you could be liable for regarding independent contractors you have hired, or are considering hiring, it’s important to speak with a Washington DC labor and employment law attorney. Contact Tobin, O’Connor & Ewing today to schedule an initial consultation.