Independent Contractor Compliance Blog

Up until now, as a general rule, employees enjoyed a series of protections and benefits that independent contractors did not receive. In part, that accounts for IC’s receiving a higher rate of gross reimbursement for their services over their employee-counterparts. Independent contractors are not entitled to unemployment insurance benefits, wage and hour protections, workman’s compensation protection, most discrimination protections or other benefits. Avoiding those benefits generally lowers the cost of employing an IC. However, this distinction could be evaporating.

Can independent contractors be protected from discrimination?

The Federal Ninth Circuit Court recently held that Section 504 of the Rehabilitation Act of 1973, a federal law prohibiting discrimination on the basis of disability by any program or activity receiving federal financial assistance, also applies to independent contractors. This is a distinctive concept not found in most other federal jurisdictions around the US. 

Section 504 reads in part:

No otherwise qualified individual with a disability in the United States, as defined in section 706 (20) of this title, shall, solely by reason of his or her disability, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service.

Do you have a federal contract or receive federal funds?

This ruling applies to any company that has a federal contract or in some other way receives federal funds.

Special accommodations for IC’s.

Under the Americans with Disabilities Act (ADA), companies are responsible to accommodate individuals with disabilities in several ways. As a result of the Ninth Circuit’s ruling the ADA may apply to IC’s the same as it does to employees.

For example if you engage an IC with a disability:

• You should assess any special needs he/she may have.
• You should determine and implement any reasonable accommodations required to provide equal participation, benefits, or to eliminate any discrimination connected with disability.
• You may need to make structural alterations to existing facilities for the purpose of assuring program accessibility.

If this ruling stands it could open up other new protections to independent contractors that before were only available to employees.

The ruling may (or may not) be appealed and overturned. However, if it stands who knows what benefits will be extended to IC’s next? 

I make it my responsibility to stay current on changes. I believe staying on the cutting edge is only one of the traits that defines an expert. At Collabrus we make it our business to stay current and maintain our expertise in IC compliance so you can focus on your expertise and your business.