Susan Nattrass, an Attorney and Former Owner of spa Violet in Cardiff, Ca, Says Spa Owners Often Pay Estheticians Illegally

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I was an independent contractor

San Diego, CA (PRWEB) February 15, 2007

It sounds like a win-win situation: Instead of putting a would-be employee on the payroll, you hire her as an independent contractor. The company likes the arrangement because it doesn't have to withhold income taxes, or withhold and pay Social Security and Medicare taxes, and doesn't pay unemployment taxes on what the worker earns. The worker likes it because her check is fatter than it would be if she were designated an employee.

But there's a catch: Many independent contractor relationships are not legally valid, a lesson that employers are learning the hard way as they face tax audits and lawsuits with potentially huge payouts. Under federal and state laws, an independent contractor must be just that--independent. He or she must provide a product or service without punching a time clock or being told how to do the job. Laws governing independent contractors, designed to protect workers from being shortchanged, have drawn increasing scrutiny and significance in recent years.

California's new minimum wage of $7.50 per hour is in effect; further increase to $8.00 per hour in 2008. Susan Nattrass, an attorney and former owner of spa Violet in Cardiff, Ca, represents estheticians in wage and hour claims against spa owners. According to Nattrass "some spa owners violate the wage and hour laws unknowingly; others know or suspect that they're breaking them but hope that they won't get caught." Nattrass owned spa Violet for two years, "paying our estheticians by the law is uncommon in this industry; estheticians expect to be independent contractors." The truth is few people qualify as independent contractors. Before hiring an independent contractor, Nattrass suggests you consult with a lawyer.

Most audits are not initiated by the agencies but by an aggrieved worker. Often a worker whose contract period has ended will apply for unemployment or seek worker's compensation benefits because of an injury. Officials ask: "Where do you work, you don't show any reported earnings?" If the answer to that question is "I was an independent contractor" you can count on an audit, not just for this worker, but for your whole workforce. Employers who try to avoid paying minimum wage and overtime soon find themselves owing back pay, fines and attorney fees.

The potential pitfalls of hiring an independent contractor typically outweigh the perceived savings. Take preventive measures in finding out whether your worker qualifies as an independent contractor.

Nattrass' law office is located at 160 Chesterfield Dr., Suite 2 in Cardiff by the Sea, CA 92007. She can be reached at (760) 650-4021.

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