Most of the statutes discussed in this guide primarily affect employers and their employees. The focus is on the employment relationship. Establishing whether an employee-employer relationship exists is, therefore, very important. First, it determines whether a statute applies and what the employer’s legal duties are toward the employee.
Example - If a person is an employee, the employer’s failure to pay that person a certain amount or to withhold income taxes may violate the Fair Labor Standards Act (FLSA), the Equal Pay Act (EPA), the Internal Revenue Code (IRC), the South Carolina Payment of Wages Act and possibly other statutes. An employer who violates these statutes could face enormous back pay liability and possible civil and criminal penalties. Second, employee status may entitle a person to participate in the employer’s pension plan, health insurance program and other fringe benefits. Again, failure to afford an individual the benefits to which he or she is entitled as an employee can have enormous financial consequences for the employer.
The term employee refers to hourly paid, rank-and-file workers, salaried persons, professionals, supervisors, management officials and temporary employees also can be employees.