Contractor or Employee – How Do You Classify Your Staff?

Frank G. Goldman, PC

The Atlanta Journal Constitution (“AJC”) recently reported that how a business classifies its workers – whether as an “employee” or as an “independent contractor” – is critical.  Improperly classifying an “employee” as an “independent contractor” can lead to a host of administrative and legal problems.  Conversely, failing to properly utilize legitimate independent contractors can leave a business at a competitive disadvantage.

Frequently, a business will try to designate a newly retained worker as “contractor” because the position does not offer employment benefits, is only needed for a set period of time, or the individual must serve a probationary period.  As Dan Chapman points out in the AJC article, this misclassification can be costly.  In a recent lawsuit brought against a Marietta, Georgia company for failing to pay new-hires overtime pay during their probationary period, the judge ruled in favor of the employees – who were wrongfully classified as “contractors” during…

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