In this paper, I’m going to analyze the scenario of the employment relationship between Mary and Little Lamb Company.
Firstly, I’m going to classify Mary as an independent contractor or an employee and provide the rationale for my classification.
The criterion used to tell an independent contractor from an employee is the degree of control and degree of independence. In other words, it means that an independent contractor has greater freedom in choosing the framework for completing a certain project than an employee: “A general rule is that you, the payer, have the right to control or direct only the result of the work done by an independent contractor, and not the means and methods of accomplishing the result.” (Internal Revenue Service, n/d., “Independent Contractors vs. Employees”)
It’s a very common case when employers misclassify staff as independent contractors, yet continues to control them as employees. I strongly deem that Mary ended up being treated as an employee, while initially she had been hired as an independent contractor. In case she was required to use company materials and equipment and adhere to company work schedules, it meant that the employer controlled how and when she was carting her project out.
There are more specific factors to consider in such a case. There are three types of control to be taken into consideration. The first is behavioral control. This kind of control implies that the employer instructs when and where to do the work, what tools or equipment to use, what workers to hire or to assist with the work, where to purchase supplies and services, what work must be performed by a specified individual, what order or sequence to follow. (Iowa Department of Revenue, 2005)
In Mary’s case, first two criteria obviously apply. Since nothing is said about the financial side of employer/employee relationship, I won’t discuss financial control. Instead, I’ll focus on the type of relationship as the third type of control, and specifically on the permanency of the relationship. “If you engage a worker with the expectation that the relationship will continue indefinitely, rather than for a specific project or period, this is considered evidence that you intended to create an employer-employee relationship.” (Iowa Department of Revenue, 2005, “Type of relationship,” para.4)
Mary’s services were used for two years, but for the budget cuts, they would have been in use for an indefinite period. All these factors classify Mary as an employee.
However, despite the change of Mary’s status, the employer-employee relationship didn’t change much. “If an employer-employee relationship exists, it does not matter what the parties call the relationship. It does not matter if the employee is called a partner, coadventurer, agent, or independent contractor.” (Internal Revenue Service, n/d., “Employer-Employee Relationship”)
It can be argued that employer-employee relationship was inexistent when Mary was an independent contractor. Internal Revenue Service (n/d., “Employer-Employee Relationship”) informs that “[i]t does not matter that the employer allows the employee considerable discretion and freedom of action, as long as the employer has the legal right to control both the method and the result of the services.”
When Mary was an independent contractor, the employer had no legal right to control the method she used to complete the project.
Now I’ll answer the question about the possible breach of the Doctrine of Employment at Will. The Doctrine of Employment at Will is based on the notion that “in the absence of a specific agreement, either party was free to terminate the relationship at any time without notice and any reason or explanation.” (Blumenreich, 1989, “Doctrine of Employment at Will,” para.1)
The breach of this doctrine didn’t occur because of the breach of public policy since it was not related to “race, sex, religion or national origin and discrimination because of age.” (Blumenreich, 1989, “Exceptions to Employment at Will,” “Public policy”)
The decision was motivated by budget cuts and not bad faith or malice. Therefore it’s not the case of breach of implied covenant of good faith and fair dealing. It can be the case of breach of implied contract since Mary must have modified her initial contract after the completion of the initial project, but to take a clear stance on this issue more information about the updated contract is necessary.
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