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How to classify independent contractors and employees differently

In Pennsylvania, it's critical for employers to clearly define whether someone who works for them is classified as an independent contractor or an employee. That's because, according to state law, unless an employer proves it otherwise, all individuals who work for a company are perceived to be employees of it.

In the state of Pennsylvania, workers must meet two conditions in order to be classified as an independent contractor. First, the worker is required to not bear any direction or control over his or her own performance of services while under contract. Additionally, the individual must be engaged in working independently for his or her own established occupation, business, trade or profession.

For those working in construction, under the Construction Workplace Misclassification Act, employers must also have a written contract with the independent contractor in order for them to be classified as such. That contract must spell out the specific services that they've hired the contractor to perform.

Certain conditions must be met in order for the person having the work done to be able to prove that the worker is independently engaged in some type of established occupation, business, trade, or profession. One way to do is is by showing that the construction worker has his or her own tools necessary to carry out the job at hand.

The person that the work is being performed for must be able to show that they will either experience either a loss or profit as a result of their contracting the worker. The worker must perform the work for his or her own gain, or for the benefit of a company under his or her direction.

Additionally, the person must be able to either prove that he or she has carried out similar work for the same individual before or that he or she has done so for others. They additionally must carry liability insurance in the amount of $50,000 or more while at work or otherwise risk being held liable for the contractor's injuries if they occur.

If you own a business whereby you have either one or both employees and independent contractors working for you, then you might want to discuss how to classify your employees with a Pittsburgh employment law attorney. In doing so, you will be able to rest comfortably knowing that you have properly classified your workers in compliance with Pennsylvania law and the Fair Labor Standards Act.

Source: Pennsylvia Department of Labor and Industry, "Employee or independent contractor," accessed Aug. 11, 2017

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