Case Study

You Decide Template

Name: ASHLY PETFORD Date______

Scenario Summary:

Your Role/Assignment:

Your role is to decide if Karen is an independent contractor or an employee and discuss some of the preventative and ethical situations that are occurring in this case. 

Questions: Do you feel that Karen is an independent contractor or an employee? What is your rationale for this decision?

Deciding the status of your employees is a very important decision, and can cost your company money if not done correctly. In general, an independent contractor is anyone who works on a temporary basis in order to fulfill a specified task. Although, there are several other requirements, that is the most distinguishable one. For this reason, I would have to say that Karen is, in fact, an independent contractor. She was originally hired as a contractor in order to perform a specific task, but has remained a part of the company to work on other projects. Also, she has records of having other clients, and is currently on retainer now.

1. What factors do you feel help contribute to Karen being an employee? 

According to the IRS, there are several rules that determine a person’s status within an organization. In terms of being considered an independent contractor, these rules primarily focus on the level of control that an employer has over the individual in question. For instance, how is the person paid, does he receive a steady paycheck, is he on the payroll? Other determinations include whether the employee supplies his/her own equipment, sets his/her own schedule, and whether the work is temporary or permanent.

2. What factors favor her being a contractor? 

Karen can be considered an independent contractor if she has overall control over how her work is done and “the person for whom the services are performed has the right to control or direct only the result of the work and not the means or methods of accomplishing the result” (IRS 2012). Also,...