By: Mark H. Shore, Esq., Stearns, Roberts & Guttentag, LLC
Contractors and subcontractors work hard, take on substantial projects, and often require significant personnel to achieve their objectives. Because of a host of issues including those involving liability avoidance, insurance mandates, and tax concerns, questions arise as to whether construction related staff and workers are employees or independent contractors. A lack of recognition of the distinctions between the two can lead to exposure and obligations that may have been otherwise avoided.
There are an abundance of Florida cases where the designated status of a worker has been challenged. The result is that there is considerable authoritative law which can help guide contractors and subcontractors to a better understanding of employment distinctions. Regardless, the task always remains for sorting out personnel, placing labels on them to differentiate employees from independents, and doing this, out of necessity, on an individual fact basis for each person so designated.
In Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966), Florida’s Supreme Court stepped into the mix, providing the following 10 point test (with the first factor arguably being the most critical), to assist in determining whether an employer-employee relationship exists:
(a). “The extent of control which, by agreement, the master may exercise over the details of the work” [The greater the control, the more likely an employee-employer relation exists].
(b). “Whether or not the one employed is engaged in a distinct occupation or business” [The more separate and distinct, the less likely an employee-employer relation exists].
(c). “The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision” [The closer the direction, the more likely an employee-employer relation exists].
(d). “The skill required in the particular occupation” [The more unique and foreign the skill is to the employer, the less likely an employee-employer relation exists].
(e). “Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work” [The greater such supply, the more likely an employee-employer relation exists].
(f). “The length of time for which the person is employed” [The longer the relation, the more indicative of an employee-employer relation].
(g). “The method of payment, whether by time or by the job” [Payment per job would be less indicative of an employer-employee relation].
(h). “Whether or not the work is part of the regular business of the employer” [The less regular the work, the less likely an employee-employer relation exists].
(j). “Whether the principal is or is not in business” [Relation with a non-business would make it less likely an employee-employer relation].
In the Cantor case noted above, the Court found that an employment relationship existed
supporting a claimed employee’s workmen’s compensation claim. In Cantor, the employee had worked for the principal for 7 years, was required to report to work regularly, was provided with his tools by his principal, and while paid in large part from gratuities, such were nevertheless deemed as wages by the Court. The claimant, determined to be an employee, and not an independent contractor, was hence entitled to workers’ compensation for injuries he received on the job while loading a trunk.
The fact that every element may not be so clearly present in each of the above factors to determine whether one is an employee or independent contractor is less important than looking at all of the elements taken together. Perhaps to best understand and summarize, the fundamental test employed by Florida’s courts to determine whether a person is an independent contractor or an employee rests in the control exercised. The decisive question is, who has the right to direct what shall be done, and when and how it shall be done. Simply put, the principal in an employee-employer relationship retains the right to control the conduct of the employee in regard to the engagement entrusted to him. Conversely, an independent contractor is not controlled or subjected to control of the principal in the performance of the engagement, only as to the result.
Factors for determining who may be an employee versus an independent contractor can be confusing and complex. Should any questions or issues arise in such designations, it’s always wisest to consult knowledgeable counsel.
About the Author: Mark H. Shore has been practicing law and litigating for the past thirty years. He is an associate with Stearns, Roberts & Guttentag, LLC. Mr. Shore concentrates his practice in contract, construction, and commercial disputes. He can be reached for consultation at [email protected].