North Carolina Workers' Compensation Law Blog

June Walker, a tax and financial consultant for the self-employed, blogs about the difference between employees and independent contractors -- an important distinction where workers' compensation is concerned.

We've blogged here before about sneaky employers that wrongfully classifying employees as independent contractors with 1099 status. By doing so, employers save money on insurance, payroll taxes, health insurance coverage and workers compensation and cheat employees out of benefits.

 In a famous and precedent-setting case involving Microsoft, the IRS ruled that the company had wrongfully classified employees as independent contractors because Microsoft controlled the "manner and means" of their work.

The ruling was clear: theirs was an employer-employee relationship, and it's the relationship that counts, regardless of any written contracts to so-called independent contractors may sign, as Walker explains here in this primer on the difference between being an employee and being a self-employed contractor..

I am employed by a person who has a house painting business, here in Fayetteville, NC.

I get paid by the hour. On payday, I found out that I am not considered an employee, I am a sub contract worker. I also discovered that my employer takes 10% of my pay each week for Workman's Compensation.

I have been researching NC Workman's Compensation Laws on the web, but
unfortunately, I have not been able to find anything concerning sub contract laws. I did find out however, that an employer who employs three or more persons is responsible to pay Workmans
Comp. My employer has six people working for him, yet we are still not considered employees.

Can anyone please tell me if my employer can legally do this? It just does not sound right to me.

Sincerely,

Don Kaminska

nope. If you sub contract, then you are responsible for providing your own insurance, which you can buy personal liability thru any insurance company. Also, if you are a sub contractor, then they usually get paid by the job, not the hour. Sounds to me like your employer is trying to get out the cheap way.

I work as a waiter in a restaurant. When i was hired i was told that they didnt pay an hourly wage. I was working for straight tips. is this legal? i just left the job after 6 months and am wondering if there is anything i can do to get paid for the hours i worked? thanks

Hello,

I am working as an "independent contractor" in NC for a company providing supplementary education services to low-income public school students, in relation to the "no child left behind" legislation. This company is based in MD., but operated in several states, including NC.

We were initially told, by or manager in NC, in early/mid Nov, that our time sheets were to be submitted on the 14th and 29th of each month and that we would receive our checks within 10 days after submission. I finally received my check for the period ending 11/14, on Dec 12, and it was for the wrong amount. I have tried to communicate extensively with the woman in charge of NC and she makes excuses, and contradicts herself. I actually believe that she/they have been experiencing cash flow problems, and are trying to cover this up by delaying (full) payment to the tutors.

At a meeting held on 12/02 she told us that after the Dec. check, we were going to be switched to once a month payment, but that we were to submit our time sheets for Dec. on 12/18, and that we would be paid for that work period,, ending 12/18, by the end of the month.

Now, in the course of my continuing attempt to receive my money, so that I can safely quit, she emailed me last evening, and told me that, due to a company wide change, we will not receive our pay for the work ending Dec. 18, until mid-January. This creates a significant hardship for me, and I am sure many of the other tutors. Are they allowed to unilaterally change the terms of the agreement and withhold our pay?

I think that they are likely not financially stable, which is a requirement for companies on the approved SES provider list, and that this is why they are not honoring their agreements with the tutors they contracted to provide their services.

I also question whether we can legitimately be viewed as independent contractors, since they trained us, both in person and online, and specify very strictly the time/place and method in which we deliver our services.

I need to know what my rights are, as an independent contractor, and also whether I might have more rights as an employee, and, if so, under what circumstances I might be considered an employee.

Thank You very much for your help..