Overview

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  Temporary workers, also known as independent contractors, provide a way for companies to fill positions without committing to long-term employment. Companies also can review the work of temporary employees without offering fulltime employment, and they can terminate temporary employment more easily. Employment laws exist that protect contract workers from discrimination and from having benefits denied. Being aware of the employment laws helps protect the employer as well as the worker and helps create a fair place of employment.
  
  

Classifying a Worker

• To decide whether a worker is a contract worker or a permanent worker the employer must determine who is responsible for establishing the worker's duties and monitoring his performance. If an outside company has that authority, the worker is a contract worker. If there are any written contracts involving benefits, such as pension, 401k, insurance or vacation, that a company is paying to a worker, the employee is a permanent worker, not a contractor. If none of these exist and the employer is not withholding taxes, the worker is classified as a contract worker. If an employer classifies a worker as a contractor without any reasonable basis, the company may be held liable to pay employment taxes. For example, if a company has employees classified as permanent doing a particular job, it would not have a reasonable basis to classify another employee performing the same job as a contract worker.
  
  

Proper Forms

• According to the Revenue Act of 1978, Section 530, employers must file a 1099 to report all money paid to the contractor. Upon hiring, the employer requires that the contractor complete a Form W-9, Request for Taxpayer Identification Number and Certification. This confirms the contractor has the legal right to work in the U.S. and the employer has the Social Security number to properly file the forms. The employee must show two forms of identification: a drivers license or state identification and a U.S. passport or Social Security card. A 1099 must be sent to the contractor by the end of January for the previous year if the amount paid exceeded $600 in one calendar year. If the contractor is hired through a second-party employer, such as an agency, the agency is responsible for all employment forms.
  
  

Laws That Protect Workers

• Title VII of the Civil Rights Act of 1964 states that the same laws that protect permanent employees apply to temporary workers. Employers are forbidden from harassing or discriminating against employers both temporary and permanent, and protection against discrimination based on a disability is covered in the Americans With Disabilities Act. If a temporary employee becomes disabled while working for your company, you must make the required attempts to accommodate this employee.