Typically, the laws governing employment discrimination do not apply to independent contractors as independent contractors are not employees of an organization; they are in business for themselves. Using this definition, independent contractors cannot, for the most part, be subject to discrimination, as the issue of employment discrimination by an employer or fellow employee(s) is only applied to employees of an organization.
The following is a list of common employment discrimination laws.
- The Age Discrimination in Employment Act of 1967 prohibits age discrimination for people over 40 years of age.
- The Americans with Disabilities Act of 1990 (Titles I and V) prohibits discrimination against qualified, disabled people because of their disability.
- The Civil Rights Acts of 1964 and 1991 (Title VII) prohibits discrimination in compensation, terms, conditions, or privileges because of race, color, religion, sex, or national origin. The 1991 act amends the 1964 act by providing for monetary compensation in cases of discrimination.
- The United States Code (Title 42, Chapter 21, Subchapter 1, Sec. 1981) prohibits discrimination on the basis of race or national origin in all contractual relationships.
- The Equal Pay Act of 1963 prohibits wage discrimination between men and women in jobs requiring equal skill, effort, responsibility, location, and conditions.
- The Rehabilitation Act of 1973 prohibits discrimination against disabled individuals in the Federal government.
- The Bankruptcy Act prevents discrimination against people who seek or have sought protection under The Bankruptcy Act.
- The Civil Reform Service Act prohibits Federal discrimination in compensation, terms, conditions, or privileges because of race, color, national origin, religion, sex, age, disability, marital status, political affiliation, and sexual orientation; as well as, prohibits action against those who file an appeal, grievance, or complaint.
- The Whistleblower Protection Act prevents retaliation against persons who report illegal activity.
Before hiring someone to perform a job, the employer must determine if the person will be an employee or an independent contractor. In addition to exemption from the majority of employment discrimination laws, independent contractors are not subject to employer rules regarding the manner in which work must be performed, rules outlined in an employer handbook, employer tax withholding, overtime laws, unemployment compensation, worker's compensation, sick leave, vacation pay, retirement benefits, and FMLA and maternity leave benefits. Learn more about the differences between employees and independent contractors.
After the employer identifies the person's employment status, he/she must treat the person accordingly. Labeling a person an independent contractor will carry no weight if the person is treated as an employee and subject to employee rules and regulations. While this seems a logical action, it is not always easily applied or remembered as evidenced by a prior ruling against The Microsoft Corporation [Microsoft]. Despite the labeling applied, Microsoft was found guilty of treating independent contractors as employees by the IRS and the Ninth Circuit Court of Appeals. Their mistake cost them dearly in terms of back taxes to the IRS and benefits to the employees.
Should the person hired feel that he/she is subject to discrimination and file suit, it will be up to the court to decide the person's true employment status. Confusingly, the determining factors used vary by court. While some courts consider the person's working conditions (where and how the person is working) to make their decision, others will use the economic realities test (where the majority of work is completed and income is derived) or the common law definition (degree of autonomy and methods and materials used) to determine the person's status.
Once the court has determined the person's employment status (employee or independent contractor), they will determine if the person has a claim for employment discrimination. Most of the cases involving independent contractors and employment discrimination suits are those where the contractor was found to be an employee, using one of the determining methods or by lack of clear definition within the law itself. Assuming the person is found to be an independent contractor using the methods above (working conditions, economic realities, and/or common law), there are few instances where true independent contractors can file employment discrimination lawsuits.
One of the more prominent cases of a successful employment discrimination lawsuit by an independent contractor is the case of Denco, Inc. v. Wal-Mart Stores, Inc. This case involved an independent contractor who won an employment discrimination lawsuit on the basis of racial discrimination. The independent contractor used Section 1981 of the United States Code to prove a contractual relationship between himself and Wal-Mart Stores, Inc. and, as a result, prove that the laws regarding racial discrimination applied. This case was won by the plaintiff and appealed by Wal-Mart, Inc. The First Circuit Court of Appeals upheld the ruling on May 12, 1999.
Although the majority of laws indicate that independent contractors are not subject to employment discrimination laws, there is always room for error if the contractor is treated as or found to be an employee. In addition, lack of clarity within the law itself may allow for a successful suit. Given this information, it may be best to subject the independent contractor to all employment discrimination laws. Doing so will force you and your organization to apply a higher standard to the contractor and will eliminate any lawsuits that may arise as a result of inaccurate employment status definition or vague legal definition.
Guru.com does not condone discrimination in any relationship, and merely provides this article for informational purposes. |