What are my rights as an independent contractor in Florida?
At MLG Business Litigation Group, our Florida attorneys understand that during peak business periods employers may turn to independent contractors to perform services that are not a part of their regular business or to work on a special assignment and fill other roles that fall outside the scope of their workforce.
When they do, they must ensure the independent contractor is accurately classified. That distinction can be easily outlined in a statement of work agreement or contract to confirm their status as a non-employee to avoid penalties associated with misclassification, which can be steep.
Here are a few things employers should know about working with independent contractors in Florida.
Who is Considered an Independent Contractor in Florida?
There are multiple differences between employees and independent contractors, with the most evident and critical elements being the employer’s right to control the individual’s means and method of accomplishing the work.
When evaluating a worker’s status, the Florida Department of Management Services determines whether an individual is an employee or an independent contractor through multiple factors, including:
- The job/project’s required skill level
- The duration of employment
- Whether the individual has a distinct profession, occupation, or business
- Tools and/or worksite location used to complete the project
- How much supervision the individual will have
- Whether the employer operates an active business
- Whether the work is a part of the employer’s regular business
- How much control the employer has over the individual’s work
- How payment is calculated
- The agreed-upon relationship between the parties
Additional differences in the business relationship between employers of independent contractors and that between employers and employees also include the following distinctions.
- Are not covered by federal Unemployment Insurance or Workers’ Compensation insurance
- Are not covered by employment and labor laws
- Compensation may be a total amount for a specific task completed or in the form of hourly, daily, or weekly rates and is typically paid when work is complete
- A Statement of Work signed contract or sent invoice dictates when payments are made
- Report payments of $600 or more in a calendar year on an IRS Form 1099
- Are generally paid an hourly rate or a salary during the same payment period — which is typically weekly, biweekly, or monthly unless formally changed
- Have all money paid to them during the tax year reported on a W-2
- Are reported by employers for state and federal Unemployment Insurance and Workers’ Compensation insurance
- Are covered by several federal and state employment and labor laws
- Are typically offered benefits such as vacation, sick time, or other paid time off, health insurance, and 401K contributions
Are Independent Workers Required to Sign Contracts in Florida?
Florida law does not require a written independent contractor agreement, but in the interest of protecting your business, it is better to have one than not.
Outlining the details of the employer-independent contractor agreement is the only way to ensure that your terms are enforceable in a court, should a breach of contract occur.
Independent contractor agreements are also an effective way to minimize potential disputes and allegations of misclassification.
What are the Penalties for Employee Misclassification in Florida?
Misclassifying employees as independent contractors can lead to severe penalties under the law, even if the misclassification was unintentional.
Fines can range from $2,500 – $5,000 for each misclassified employee, not to mention potential litigation initiated by the employee.