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 federal and/or state law. In Texas, the issue arises most frequently in the areas of unemployment compensation and workers’ compensation. In the federal arena, the issue arises most often under the tax withholding requirements of the Internal Revenue Code and the minimum wage and overtime requirements, as well as the recordkeeping requirements, of the federal Fair Labor Standards Act (FLSA). It also is a topic that receives much attention under the National Labor Relations Act (NLRA), because employees, but not independent contractors, receive the protections of the NLRA.
Note: A worker may be considered an independent contractor for purposes of one law, but not another.
Under the common law test, a worker is an employee if the purchaser of that worker’s service has the right to direct or control the worker, both as to the final results and as to the details of when, where and how the work is done. Control need not actually be...
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