Question of the Week: Why Does Training an Independent Contractor to do a Job Make Them an Employee Under Common Law?
The other day I was asked, “Why does training an Independent Contractor to do a job make them an employee under common law?”
The client went on to explain it’s usually necessary to train a new person who will be working on a project so they can fit in with the regular staff and know company policies and operations. It’s really not reasonable to expect an outsider to come in and work without some type of orientation and training. So why does this indicate an employment relationship?
The short answer:
Because when you train someone you are telling them how you expect them to do the work, and that’s proof of direction and control-the primary common law factor.
The explanation:
Typically, employees are trained while Independent Contractors are recognized experts and need no training. IC’s are bringing something to the table your company doesn’t have. If you need to train someone how to do the job, it makes them less of an expert and gives you more control over the details of how they will perform for you.
Training shows direction & control because it is a method of communicating detailed expectations of performance and procedures on the job. Making training mandatory for anyone is a strong indicator of an employment relationship. The fact you have the authority to make training mandatory shows direction and control.
Training is an actual, documented act of control. In a hearing or trial, the government or opposing counsel will probably offer evidence of training to win their case. In addition, paying the consultant during training becomes the smoking gun in a tax hearing. It’s saying, “I’m paying you to learn this information and I expect you to do it my way when you perform services for me.”
Some orientation may be OK.
Having said that, it is reasonable to provide some orientation to your new IC to insure they know where the restrooms are, office hours, security requirements, and other general information required for anyone who may be spending time in the building. Detailed procedures and information about how the job should be conducted start to move the relationship towards direction and control again. For example, it’s reasonable to show the consultant proprietary software and expect him to work within that framework when writing programs or acting as a user. However, the further you go down this road and the more instructions you provide, the closer you approach employee status, so be careful.
It’s a judgment call and that’s why there are judges. You need an expert (someone who has seen thousands of these examples and has made correct decisions) to tell you when you’ve gone over the line and converted your IC to an employee because of training.
No one factor will decide.
Remember, as powerful as training is, it alone will not be enough to determine the relationship either way. All the common law factors that describe the working relationship must be weighed and considered as a total picture before you can correctly determine if someone is an employee or Independent Contractor.
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