In 2014, Fedex employees won a case when federal appeals court ruled that the employees were not actually independent contractors and the company would be on the hook for hundreds of millions of dollars in unpaid overtime. Employers must learn the many rules of the law involved in independent contracting, such as not treating somebody like an employee if they call them an independent contractor. They have also found that it is probably a good idea to have a solid contractor agreement in place.
The reason why many lawsuits have stemmed from these cases over the years is because independent contractors are generally not eligible for workers’ compensation benefits, but employees are. The lines become blurred by the fact that some independent contractors will, in fact, be eligible to receive benefits because they have been misclassified and must be able to first prove their case. There are many factors that must be weighed in these cases. For instance, how permanent is the relationship between the employee and employer? How much has the worker invested in equipment or materials? Are the employee’s services an integral part of the business? You may be considered an employee after all, so these factors must be considered.