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Untangling Liability: A Guide to Understanding and Managing Risks with Independent Contractors

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An independent contractor is someone who provides services to a client or business entity under the terms of a contract or agreement and, more importantly, is defined by law to not be an employee of the company. Unlike employees, independent contractors are considered self-employed and are typically responsible for managing their own work schedules, equipment, and taxes. The key distinction lies in the level of control and independence the worker has over their work. The internal revenue service and the Department of Labor employ tests to determine if a person is an employee or has been incorrectly designated as an independent contractor. The designation of a person as an employee versus an independent contractor can drastically affect the liability and exposure of a business.

An employer hiring an independent contractor is generally not obligated to guarantee the safe execution of the contractor's work. Nonetheless, an exception to this principle emerges when the employer maintains a degree of control over how the general contractor carries out the tasks, leading to potential liability for damages incurred. JLB Builders, LLC v. Hernandez, 622 W.3d. 860, 865.

A general contractor owes a duty of care to its independent contractor if the general contractor retains actual or contractual control over the means and methods of the independent contractor’s work.

The authority to initiate or halt work and to provide directives on when and where tasks are executed does not inherently imply a duty of care. Exerting control over the overarching timing and sequence of work does not establish a duty of care, rather, it simply indicates that the general contractor is fulfilling its standard responsibilities as a general contractor. Id at 866.

Additionally, the presence of a contractor’s safety employee alone does not impose an obligation to intervene for ensuring safe work practices by independent contractors However, if this safety representative provides detailed instructions on the methods of execution, a duty of care may be triggered. Id at 867.

This nuanced understanding is crucial for both employers and independent contractors to navigate legal considerations and foster a collaborative and responsible working relationship.

If you have questions as to your company’s policies and procedures as to employees and independent contractors, contract the Vethan Law Firm, P.C. where

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