Employee versus Independent Contractor a. Identify the criteria that determine employees versus independent contractors. b. Provide a summary of a court ruling that applied the employee versus independent contractor concept. Provide the citation for the case.
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Monica has a contract for service with Industrial Injection Molding Solutions. The factors used to determine this include the fact that Monica provides property maintenance services to the company, she is paid a flat amount monthly, and she hires part-time workers when necessary. Additionally, Monica uses her own tools, but the company supplies and maintains certain equipment for her use. To make this decision, I referred to the guidelines provided by the Internal Revenue Service (IRS) in determining whether a worker is an employee or an independent contractor. These guidelines consider factors such as the degree of control the company has over the worker, the worker's investment in their own tools and equipment, the worker's opportunity for profit or loss, and the permanency of the relationship between the worker and the company. Based on these factors, it is clear that Monica has a contract for service rather than a contract of service. She has control over her own work and hires additional workers when needed, indicating a level of independence. She also uses her own tools, further supporting her status as an independent contractor. Source: Internal Revenue Service (IRS) guidelines on worker classification.
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Read the fictitious scenario below and select the most correct answer: Sarah owns Eco Building (Pty) Ltd, a construction company that specialises in environmentally friendly building materials. Sarah must identify her employees as well as any third-party contractors who are currently working on the same building project. What inquiries must Sarah, the employer, make when applying the control test to distinguish employees from third-party contractors? Group of answer choices Does the employer have the authority to monitor and control the employee? Is the employee an essential part of the employer's organization? Is the individual financially dependent on the employer? Is the individual a member of the employer's organization? Is the person wearing the company's uniform or following a dress code? Is the person involved in organizational activities? Is the person a member of the pension fund or medical aid? Is there any aspect of employer control over the employee's work? For example, are instructions provided as to what work must be completed? What is the overarching impression created by the working relationship? Does the employer choose who does the work, can the employer fire the person, must the person work specific hours, is remuneration based on time worked, does the employer provide the necessary tools, equipment, or office space, and can the employer assign task as it sees fit?
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QUESTION FIVE Selena works at Jackson's coffee shop as a singer. She performs every day from 5 pm until 7 pm. Selena also received a uniform with Jackson's shop information to wear during her performance. Selena was given a contract from Jackson for a period of 2 years, and she is often invited to join staff parties and social events which are hosted by Jackson. Selena submits invoices and charges VAT as she belongs to a closed corporation which has two (2) other people in it. 5.1 You are required to list the differences between an employee and an independent contractor (6 Marks) 5.2 Based on the set of facts above, determine whether Selena is an employee or an independent contractor. Justify your answer fully. You are required to cite the applicable case law (9 Marks)
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