Are you an employee or a subcontractor?
Friday, March 25, 2011 at 10:18AM
Mark Risk in Cadillac unemployment, Northern Michigan Unemployment law, Petoskey Unemployment, Unemployment, Unemployment benefits, Unemployment lawyer Traverse City, concerned about your rights, fired from job, subcontractor vs employee

Some employers are calling “employees” subcontractors.  This is done for a variety of reasons.  This usually includes not having to pay for workers compensation insurance and unemployment insurance.  This can add up to huge savings.

But what your employer calls you is not necessarily what you are.  You can call an apple an orange, but it does not make it so.  If you believe you are really an employee then file for benefits. An Administrative Law Judge will decide which one  you are.

Photo: Mas AbieIn Michigan the most referred to case on this issue is McKissic v Bodine, 42 Mich App 203 (1972); lv den 388 Mich 780 (1972).  Here the Court set out a test of eight factors to look at to make the decision.

The Court stated: “The test to determine whether an employee-employer relationship exists for purposes of the Worker's Compensation Act is the "economic reality test", and the factors used to apply the test are whether: (1) the employer will incur liability if the relationship terminates at will; (2) the work performed is an integral part of the employer's business; (3) the employee primarily depends upon the wages for living expenses; (4) the employee furnishes equipment and material; (5) the employee holds himself out to the public as able to perform certain tasks; (6) the work involved is customarily performed by an independent contractor. Along with (7) the factors of control, payment of wages, maintenance of discipline, and the right to engage or discharge employees; and (8) weighing those factors which will most favorably effectuate the purposes of the Act.

Obviously, this is a complicated test.  But if it can be simplified I’d say it looks at degree of control.  The more the employer controls what you do, where you do it, how you do it and when you do it, determines if you are an employee or subcontractor.  The more the control the more likely you are an employee.

If you have any questions regarding your status as an employee or subcontractor, you should contact a lawyer who is familiar with unemployment law.


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