The issue of an individual’s status as an employee, independent contractor or laborer arises in at least four separate areas on the part of employers under either federal or state law. In Tennessee, the issue arises in the areas of unemployment compensation and workers’ compensation. In the federal arena, the issue arises under the tax withholding requirements of the Internal Revenue Code (IRC) and the minimum wage and overtime requirements, as well as the recordkeeping requirements, of the federal Fair Labor Standards Act (FLSA). It is important to note that a worker may be considered an independent contractor for purposes of one law, but not another.
The issue of how a worker will be treated by a company and which laws apply to the worker is often referred to as an “individual status.” Different sets of tax, labor, and other laws apply based on the working classification. Status will fall into one of three categories:
There are at least four separate areas where these classifications matter under either federal or state law, including requirements of the Internal Revenue Code (IRC) and the minimum wage and overtime requirements, as...
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