Independent Contractors vs. Employees

In Accounting & Finances, Business, Taxes on January 19, 2014 by Sufen Wang Tagged: ,

MH900251655Court Rules Back Wages Must Be Paid

Well, Folks, it’s that time of the year for 1099 processing for all of the people who worked for you in year 2013, who are not your employees, but provided a labor service for your business.  

What is the fine line separating an independent contractor from an employee?  Here’s a recent court ruling for you as some food for thought…

100711_stripclubAre you smarter than a stripper? Only if you know the difference between an independent contractor and employee. And if you can find all the stripper puns to come. (Extra points if you find ones that aren’t there.)

Unique S. Butler sure knows that exotic dancing is no joke. Known as “Dior” at Norma Jean’s – the Baltimore strip club she worked at from 2007 until being fired in August 2012 – Butler filed a lawsuit in U.S. District Court in February against the club and its owner, PP&G Inc. She bared all, saying the club didn’t pay her wages for her hard work.

Wages are those things you’re supposed to get when you put in seven-hour shifts at a business up to seven nights a week. Which was Butler’s schedule at Norma Jean’s. And this was on top of paying a $45 tip-fee to the club each day, along with $20 if she was late.

Norma Jean’s legal retort: all its dancers chose to be classified as independent contractors. Dancers work on their own schedules, not in shifts, and those fees are used for stage upkeep and use of a locker and DJ equipment.

gty_cash_pile_mi_130722_16x9_608That limp explanation didn’t fool the court. Judge William M. Nickerson determined that Butler was an employee because the club controls the flow of customers, requires no specialized skills, and relies on the exotic dancers for its business. So under federal law Dior is entitled to back wages for all her full-frontal, up-and-down, and side-to-side work, and damages, which will be decided at trial.

2049877This article is just the tip in terms of understanding how employees and independent contractors work…it. The bottom line is that the line between the two can be blurry at times, and not just because you’ve had too many drinks. You can find out more about the independent contractor risky business here and all of the responsibilities it in-tails, ahem, entails.

Sufen Wang, M.S.Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

4 Responses to “Independent Contractors vs. Employees”

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