Understanding Worker Classification Crash Course

How to distinguish employees from independent contractors.
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  • Lectures 20
  • Contents Video: 1.5 hours
    Other: 20 mins
  • Skill Level All Levels
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
    Certificate of Completion
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About This Course

Published 4/2015 English

Course Description

Understanding Worker Classification is a crash course that will help business owners learn the factors used to determine whether a worker is an employee or independent contractor.

The additional bonus resources included with the course are:

  • Independent Contractor v. Employee Self-Assessment questionnaire (one for each test covered in the course: 20 factor, IRS Test and Economic Realities Test);
  • Independent Contractor Worksheet (one for each test covered in the course: 20 factor, IRS Test and Economic Realities Test);
  • 5 Step Guide to Conducting your Self-Audit;
  • 20 Factor Cheat Sheet with examples;
  • 50 State Survey that sets forth the worker classification tests used in each state; and
  • IRS Independent Contractor Information Sheet
  • Form Independent Contractor Agreements for Single Projects and Recurring Projects

There is about 2 hours of learning material including videos, power point presentation, and audio recordings.

I will discuss some background issues on worker classification and then dive right into the 20 factor test. I will define each factor and discuss a comparison of two cases: one where the worker was determined to be an independent contractor and another where a class of workers were found to be employees. That way, you can see real situations that these factors were applied and learn common "do's and don'ts." After every 5 factors, I will do a brief recap and discuss important take-a-ways. Once we conclude the 20 factor test, I also address the IRS Test and the Department of Labor Economic Realities test. I will then go through next steps for your business and the 5 simple steps to conduct your self-assessment. After that, I do a lecture where I discuss the key provisions of the form contracts that are included in the course and then I give a course wrap up.

Worker classification is a hot issue for the federal government and state agencies which have increased audits in this area. Understanding these issues will help your business get proactive and hopefully stop a problem before it starts.

Please remember that the information in this course should be used as a general reference and you should not solely rely on this information for making legal decisions. You should consult an attorney for employment law issues.

What are the requirements?

  • Students will need software or programs that allow them to view pdf and excel documents

What am I going to get from this course?

  • Learn common factors used to test whether a worker is an employee or independent contractor
  • Apply common factors to their personal business situation
  • Use Self-Assessment Tools to identify business practice that may adjustment so workers can be properly classified as independent contractors
  • Keep organized records of your contractors' classifications

What is the target audience?

  • This course is meant for business owners who have independent contractors or who intend to have independent contractors.
  • This course could also be for attorneys or HR personnel looking to gain a better understanding of worker classification issues.
  • This course is probably not for those who don't have a workforce or have any interest in employment law.

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Worker Classification Basics
02:29

The introduction will give a brief overview of what the course is about as well as the course objectives and goals for the students.

03:03

This section will discuss the following:

  • definition of worker classification,
  • why worker classification matters for businesses
  • consequences for classifying a worker as an independent contractor when the worker should be an employee
  • why businesses like to classify workers as independent contractors;
  • what gives rise to a classification audit; and
  • what to do if you're faced with an audit.

I also share some recent facts on how 19 states have received funds from the federal government solely for worker classification detection and enforcement. Yikes! Watch the lecture to find out if your state is one of them.

01:37

This section gives a brief overview of the various tests used to evaluate worker classification. I will also give some background on the two cases that we were evaluate in the case comparison: National Heritage v. DES and CLEAN, LLC v. DES.

Don't forget to download the resource attached. I spent many many hours preparing a 50 state survey that provides the worker classification test used in each state (for both employment and workers' compensation) and give you links to other state resources in this area.

Section 2: The 20 Factor Test
07:40

This lecture will define the first 5 factors. These factors are:

  • level of instruction,
  • training,
  • business integration,
  • services performed personally, and
  • control of assistants.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

01:39

This lecture recaps the important points and key take-a-ways from factors one through five.

07:25

The lecture goes over factors six through ten which are:

  • Continuity of relationship,
  • flexibility of schedule,
  • demands for full-time services,
  • need for on-site services, and
  • order and sequence of work.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

01:39

This lecture recaps the important points and key take-a-ways from factors six through ten.

07:25

The lecture covers factors eleven through fifteen which are:

  • requirements for reports,
  • method of payment,
  • payment of business/traveling expenses,
  • provision of tools and materials, and
  • significant investment.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

02:01

This lecture recaps the important points and key take-a-ways from factors eleven through fifteen.

08:50

The lecture discusses factors sixteen through twenty which are:

  • realization of profit or loss,
  • working for multiple companies,
  • services to the general public,
  • right to discharge, and
  • right to terminate.

After I define each factor, I will discuss the case comparison and show you how two different companies structured their relationship with its workers as it relates to each factor. You will also see the courts decision about whether each factor weighed in favor of independent contractor, employee, or neutral and why.

01:32

This lecture recaps the important points and key take-a-ways from factors sixteen through twenty.

01:37

This section covers a summary of the case comparison and the result of each case. This lecture also discusses other important things to consider when determining the classification of a worker.

Resource: Common Law Factors with examples is a 1 page cheat sheet that contains the 20 factors with an example of an employee versus and independent contractor in each factor.

Section 3: Bonus Lectures: IRS and Department of Labor Independent Contractor Tests
06:17

This course covers the 20 Factor Test and by now, you should have a solid understanding of the things that an agency may consider during a classification audit. As an added bonus, this lecture reviews the current IRS classification test (which uses most of the 20 factors). The materials includes and IRS Test Information Sheet that can be used as a reference.

*Please note that the self-assessment materials are included under What's Next for your Business.

04:44

As of July 15, 2015, the United States Department of Labor issued guidance on the test it used to determine if a worker is an independent contractor or employee under the Fair Labor Standards Act. This lecture goes into a basic and general background of the FLSA and introduces the Economic Realities Test.

16:07

This lecture takes a deeper look into each factor of the Economic Realities Test and provides examples directly from the Department of Labor to help you better understand each factor. The materials include a pdf of the powerpoint slides.

Section 4: Next Steps for your Business
12:01

This lecture will discuss next steps for your business and provide you with self-assessment tools so you can evaluate your own business practices. For each of the 20 Factor Test, the IRS Test, and the Economic Realities Test, the materials include:

  1. A self-assessment questionnaire to get you thinking critically about your business practices; and
  2. A worksheet that organizes the results of your assessment so you can get a holistic view of where you may need to make adjustments.

Using these three tests in conjunction with one another and making the necessary adjustments should help reduce the risk that your contractors are later classified as employees.

06:38

Now that you have an understanding of the 20 factors and have been thinking about your own business situation, I will cover 5 simple steps you can take to conduct your self-assessment. These steps are:

  1. Get Organized
  2. Determine Audit Type
  3. Complete Independent Contractor v. Employee Self-Assessment Form
  4. Complete Independent Contractor Worksheet
  5. Make Adjustments
The resource guide attached can be used as a easy reference to refer back to these steps.
Contractor Agreements
08:56
Section 5: New Developments
11:31

This lecture analyzes the Missouri Supreme Court case of Gateway Taxi Management v. Department of Employment Security and the effects it has on worker classification issues.

Section 6: Course Wrap Up
Course Wrap Up
00:59

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Instructor Biography

Mary Hodges, Esq, Entrepreneur and Legal Adviser for Startups

I founded The Hodges Law Firm, LLC in 2014 because I wanted to pursue my passion to represent start-ups and entrepreneurs. I felt that becoming a business owner would help me better understand the trials and tribulations of my clients. Quickly after starting my own firm, I realized that the cost of legal services was a barrier for many start-ups.

As a Udemy instructor, I hope to be able to offer resourceful information for business owners so they can grow while managing risk.

Prior to opening my own firm, I obtained experience offering compliance and regulatory advice to investment advisory and precious metals firms. That experience coupled with my educational training provided me with the unique ability to analyze complex laws and regulations and transform that information into sustainable business solutions.

I obtained an LLM in taxation from the Washington University School of Law in 2011 and received my Law degree, magna cum laude, and Masters in Business Administration degree, magna cum laude, from St. Thomas University School of Law in Miami, FL in 2010. While as St. Thomas, I served as Notes and Comments Editor for the St. Thomas University Law Review. In 2007, I received my Bachelor of Arts degree, cum laude, from DePaul University in Chicago, IL where I competed on the Division I Track and Field team and received several scholar-athlete awards, including the DePaul Women's Big East Conference Scholar Athlete of the Year.

I am licensed in the State of Missouri

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