Social Media: What Can Your Employees Say, or Not Say, About Your Business?

Social Media. Just a few years ago this term didn’t even exist, but in the last ten years Facebook, Twitter, LinkedIn, Reddit, Tumblr, etc., have exploded in popularity. People are talking about and photographing what they’re doing, what they’re eating, what they’re kids are doing, what they’re cats are doing.

But what happens when people start talking about their jobs or their employers on social media? No one wants to be embarrassed in front of others, and this is especially the case when an employee discusses your business’ ‘dirty laundry’ online. Such public conversations can lead to lost customers and lost income.

It is one thing to fire an employee for bragging online about falsely taking sick days, or about hating the product or calling the boss an idiot, but what can an employer do when an employee writes on social media about his or her experience at work? The answer, of course, is that it depends…

Section 7 of the National Labor Relations Act (NLRA) guarantees that “employees shall have the right to self-organization, to form, join, or assist labor organizations … and to engage in other concerted activities for the purpose of … mutual aid or protection….” Section 8 of the NLRA prohibiting an employer from “interfering with, restraining, or coercing employees in the exercise of the rights guaranteed in Section 7.”

So when two employees of a sports bar were fired after they discussed the employer’s perceived failings with regard to tax withholdings that left the employees liable for more state income tax then they thought they should have to pay, the National Labor Relations Board (NLRB) became involved.

One employee wrote on his Facebook page:

“Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly!!! Now I OWE money … Wtf!!!!”

The other employee “liked” the status update and responded by commenting:

“I owe too. Such an asshole.”

The NLRB held an administrative hearing that found that the employer sports bar violated the NLRA when it wrongfully fired the two employees. The restaurant appealed the case to the United States Court of Appeals for the 2nd Circuit.

The case of Triple Play Sports Bar and Grille v. National Labor Relations Board was decided just last month, on October 21, 2015, and the Court of Appeals upheld the NLRB’s decision.

The Court ruled that an employee’s rights under Sections 7 and 8 “must be balanced against an employer’s interest in preventing disparagement of his or her products or services and protecting the reputation of his or her business” and “an employee’s communications with the public may lose the protection of the Act if they are sufficiently disloyal or defamatory.” The key, however, is for the communications to “amount to criticisms disconnected from any ongoing labor dispute.”

In this instance, the activity was protected because it was “part of an ongoing sequence of discussions that began in the workplace about [Triple Play’s] calculation of employees’ tax withholding.” The comments on Facebook were protected because “the discussion concerned workplace complaints about tax liabilities, [Triple Play’s] tax withholding calculations, and [the] assertion that [one employee] was owed back wages.” Also, the Facebook commentary was not so disloyal as to lose protection of the Act because “[t]he comments at issue did not even mention [Triple Play]’s products or services, much less disparage them.”

Triple Play violated the NLRA by (1) threatening employees with discharge for their Facebook activity; (2) interrogating employees about their Facebook activity; and (3) informing employees that they were being discharged for their Facebook activity. The Court also ruled that an internet/blogging policy would violate Section 8 “if it would reasonably tend to chill employees in the exercise of their Section 7 rights” and concluded that Triple Play’s policy did so violate Section 8 because “employees would reasonably interpret [Triple Play]’s rule as proscribing any discussions about their terms and conditions of employment deemed ‘inappropriate’ by [Triple Play].”

In conclusion, your employees are going to talk about work online. Don’t react right away to commentary by your employees on social media. Social media has become, in just a few short years, a “meeting” place for employees to discuss work related issues. Sometimes posting are going to be potentially or borderline defamatory, disloyal, and perhaps unprofessional. Depending on the subject matter, they may also be protected by federal and/or state labor laws. Also, check your employee handbook. Do you have an internet or blogging policy? If not, you should. If you do, can it be interpreted to violate the NLRA? Talk to your attorney before making any decisions you may regret.

What to Think About When Incorporating Your Business

Recently I had two people come to me with opposing circumstances. One had been operating his business as a sole proprietorship for years and the other had just started a new business and immediately incorporated it as a limited liability company (LLC). Neither had discussed his options with an attorney before going forward. This got me to thinking about the benefits of incorporation as well as what entrepreneurs need to think about when starting a new business.

Many individuals and companies believe that corporations are more stable business partners and prefer to do business with an incorporated company. Something as little as adding the letters “Inc.” or “LLC” to your business name adds instant legitimacy and authority.

Corporations (C Corps., S Corps. and LLCs) allow owners to separate the liabilities of operating a business from their personal assets. If you have properly set up your corporate entity and follow the required corporate formalities, having a corporation separates your personal assets from the business’ debts and obligations. For instance, if an employee is at fault for a car accident while on the job or in a company car, the corporation will be liable to the injured person. If you operate your business as a sole proprietorship or partnership, you could be personally on the hook for the injuries and property damage.

When a sole proprietor or partner dies or stops working, the business simply ends. In contrast, corporations are like the “Energizer” bunny. They go on and on and on, continuing to exist and do business even if the shareholders or management changes.

Corporations deduct normal business expenses, including salaries. If you have a corporation, you can pay yourself a salary because you are an employee of that business. You can then pay yourself dividends based on the corporation’s net income.

If you have multiple founders, incorporation can prevent misunderstandings about who gets what share of the business. It can be very hard to work this out after the fact, once promises are made or if certain founders leave before incorporation.

If you are hiring employees or independent contractors, it is much better to have agreements through a corporate entity rather than an individual. Also, many new businesses simply don’t have the cash to pay employees or independent contractors and it is a lot simpler to grant stock options as compensation rather than make promises of stock options once the corporation is formed.

If intellectual property is being created, it should be in the name of the business entity. You don’t want to be in a situation where the person in whose name the IP has been patented leaves without assigning the IP to the corporation. It may be all but impossible to use the IP in the name of an ex-founder.

If you are going to get funding for your new enterprise, you had better have a corporation to receive the investment and hand out shares.

In conclusion, there are a lot of benefits to incorporation. While simple incorporations can be done online and at a nominal cost, if your business involves more than one person, real thought needs to go into the decision making process. It is worth the time (and money) to discuss your individual circumstances and needs with your attorney.

Form Non-Disclosure Agreements Aren’t worth the Paper they are Printed On.

It is pretty rare these days for someone in business not to have been asked at one point or another to sign a confidentiality or non-disclosure agreement. Everyone who thinks they’ve come up with the “next big thing” walks around toting blank NDAs, thinking it will keep their new version of sliced bread safe. 99% of these aren’t worth the paper they are printed on.

Form NDAs are particularly worthless because they are forms – in an attempt to be one size fits all, they purport to protect from disclosure everything, including the kitchen sink. The problem is that courts will only enforce NDAs that:

  • Are narrowly tailored to protect only actual trade secrets and information that is both not generally known and that provides a business with a competitive advantage;
  • Specifically sets forth to whom the protected information is being disclosed;
  • Specifically sets forth the intended use of the disclosed information;
  • Specifically sets forth what the person receiving the information must do to maintain confidentiality;
  • Set forth what the remedies (injunction/damages) are to be should there be a breach of confidentiality; and
  • Specifically sets forth how long the information will remain confidential;

The last one, length of time, needs to be independently addressed because it isn’t about identifying a set time, i.e., one year or two or five. To my mind, the better thinking is that the NDA should not have a specific end date, but remain in effect for however long the information is both not generally known and competitively advantageous. The concern is that a court will want to “rephrase” an agreement with no expiration date to what it deems a “reasonable” time, so I think the better practice is to specifically state that the NDA remains in effect until the contingency, the information becomes public or loses its competitive value, occurs. If your NDA is part of a larger contract with an end date, an actual expiration, such as one year after the end of the main agreement, might be negotiated.

In other words, an NDA that is vague, ambiguous, and generic – a form non-disclosure agreement – is almost always going to be unenforceable.

This isn’t to say that you must reinvent the wheel for every NDA you sign. Certainly, much of the language will be the same from NDA to NDA, but the key language must be particular to the needs of the specific relationship to maintain enforceability. Don’t expect an NDA you copied off the internet is going to protect your information.

What to Look Out For When Leasing Retail Space

There are many factors to consider when leasing a retail space for your business. Most of these are dependent on the location of your new work space. Here are some tips you may want to follow to make sure your venture is successful.

  • Look in advance: Start looking for a place months in advance. If you wish to open in, say, 6 months’ time, you should have all the lease documents and other important papers ready.
  • Know what you want: Call a property agent’s number only after you have a good idea about the location and type of commercial space you want. This will save you time as you will have rejected many unaffordable or unsuitable locations already.
  • Select a prime location: The property you rent should be in a place where your business will do well. Having a really well-furnished space in a place that is inconvenient to your customers is a big, even fatal, setback. Don’t assume that if you build it they will come. Do your homework! Who are your customers? Where do they live? Where do they work? Does this space have strong visibility from the street?
  • Do your co-tenant research: Co-tenants selling the same things as your store can be strong competitors. Your research should give you an idea of how your business will be affected. Often, the landlord will own other shopping centers near your preferred location. An exclusivity clause for the center in which you are located won’t help you if the landlord can rent to your competition just a mile down the road.
  • Understand the property: The frontage, bathroom position, ceiling, air conditioning, parking spaces, etc. should all be as per your needs.
  • Get the LOI: The letter of intent (LOI) is not a binding agreement. But it lists all the details of the terms of the lease. Every term of the agreement is negotiable. You will definitely want to have thought through, and discriminate between what you must have what you want to have, what you don’t care about. Discuss all of this in advance with your attorney and/or commercial broker.
  • Get your guarantor ready: Unless you are a well-known, large business, you need a guarantor to pay the landlord for the remaining duration of your lease or till your landlord finds a new tenant, should your business fail. Often you and your business partners are the guarantors, personally on the hook for the rent, should your business entity not pay the rent. Don’t lease more space than you can chew if your plans don’t work out.
  • Know the type of lease: Leases can be classified as gross leases (where the landlord pays for the building’s property taxes, insurance and maintenance),[1] modified gross leases (where the tenant pays base rent at the lease’s inception but in subsequent years pays the base plus a proportional share of some of the other costs associated with the property, such as property taxes, utilities, insurance and maintenance),[2] and triple net leases (where the tenant is responsible for all of the costs relating to the asset being leased in addition to the rent).[3] Find out the terms of your lease and know how much additional fee you are being charged above the base rent, if any. In many cases, landlords will offer you discounts on some terms.

Conclusion

A retail space is a big investment for your business. Make sure you take every step after considerable thought so that you can reap good profits from of your retail stores.

[1] http://www.investopedia.com/terms/g/gross-lease.asp

[2] http://www.investopedia.com/terms/m/modified-gross-lease.asp

[3] http://www.investopedia.com/terms/n/netnetnet.asp

What to Look Out For When Leasing Office Space

Leasing an office space is a big decision that requires a lot of thought and careful planning. Here are some of the things you should consider before leasing an office space.

  • Your office space is a reflection on you and your business – it tells others what to think of your business. Fancy offices tell your clients and competitors that you are successful, powerful and expensive to hire. Low end space tell them you are struggling. What message do you want your office space to present?
  • Location, location, location. This cannot be emphasized enough. You should find a place which is comfortable for your workers to commute to, with public transport facilities nearby and affordable lunch food choices for your staff and lodging facilities for out of town clients and business people. The quality of your workforce depends on your providing a workplace people want to come to.
  • While scrutinizing the location, you must also think of how easily the customers can reach you. Ensure there are enough transport facilities and parking slots in the location.
  • You should be thinking about the floor space you will need. Make this decision based on how the number of employees. You need at least 250 square feet of space per person aside from any common areas such as conference halls, storage, pantry, bathrooms, etc.
  • Calculate any other bills you will have to pay and fix your budget accordingly. Your budget should not be more than 4-5% of your overall operating costs. This must include any potential maintenance costs along with the base rent you pay.
  • Get a commercial real estate agent who specializes in office space to show you around. Agents know their territories and will find the best deals for you.
  • How long it is that you will plan to stay in this location? A lease of three to five years is not unusual. Is there room to expand as your business grows and the number of employees rises? Options for additional space are better than leasing, and paying for, empty offices now. Remember, everything is negotiable.
  • Finally get a real estate attorney to write or review your agreements. An attorney will also help you negotiate prices with the lessors.
  • Office space leases are typically “triple net.” In other words, a lease agreement that designates the tenant as being responsible for the the costs relating to the proportional square footage of the space being leased in addition to the rent under the lease. The structure of this type of lease requires the lessee to pay for proportional net real estate taxes on the leased asset, proportional net building insurance and proportional net common area maintenance.[1] Ask your agent to analyze if this will suit your business needs.

Conclusion

An office space lease should be carried out only after considering the location, accessibility, commutability, budget, additional costs, loopholes in agreement, etc. Making an informed decision will save you money and ensure smooth operation of your business.

[1] http://www.investopedia.com/terms/n/netnetnet.asp

What to Look Out for When Leasing Industrial Space

The term “industrial” space refers to certain kinds of commercial property, such as light manufacturing buildings, warehouses and factory/office multi-use buildings. There are real advantages to industrial space, such as flexible zoning, the opportunity for custom renovation and leasing flexibility.

Nevertheless, leasing industrial space requires ample planning, such as preparing the location for expansion, additional power requirements, etc. Here are some things you should look out for when leasing an industrial space.

  • Your actual square footage area may be different from what is advertised. Sometimes, the areas located beneath drip lines and space used for building walls are included in the total footage area. Be aware that this could substantially decrease the usable square footage.
  • Depending on your planned usage, you have to consider the actual load on the slab. Make sure you do not overload or overstuff spaces.
  • Ensure that all bathrooms are ADA compliant.
  • Identify all operational costs for which the landlord will charge you. Many industrial parks have common area maintenance (CAM) fees on top of the lease. This may include maintenance of ceilings, windows, glasses, paint, etc. You may also incur maintenance costs for parking lots, lawns and landscapes, snow and trash.
  • In a similar way, clarify what is covered under capital costs at the onset. The owner may avoid many structural modifications if you fail to do so.
  • Make sure your assigned parking area is discussed beforehand and incorporated into the lease.
  • Do not fall for the zoning trap. Make sure the parking is adequate for your use or move on to another site. (This happened to a client who didn’t include me in their plans until after they signed papers and it was a mess).
  • Any trucks and trailers should be able to reach your docking area to load and unload successfully. Make sure the part or the building allotted to you supports this.
  • When purchasing the HVAC maintenance contract, make sure that the units have been inspected and the observations are documented. Negotiate on working with the existing HVAC only after a thorough inspection.
  • You need to be careful with your actual energy requirements, which may be greater than you think. Get an engineer to inspect the requirements of your machines.
  • You never know when your industry may need to expand. Discuss terms for expansion with your landlord. Your neighbors may also want to expand at your cost. Be prepared for such problems.

Conclusion

An industrial space can give you flexibility, value and maximum output if you consider the floor, power, maneuvering, parking, and expansion requirements of your business. Follow the above tips for best results.

What to look out for in a Commercial Property Purchase Agreement

When buying a commercial property, there are many factors about which you must be cautious. Commercial Property Purchase Agreements are complex and it is easy to miss some points. The most common mistakes include forgetting to enquire: (1) if the property is leased and for how long; and (2) if the property is zoned for manufacturing or other aspects of your business, so that you may lawfully operate your business at that location. In general, you should keep the following points in mind when creating an agreement for your purchase.

• Do not fall for the trick of a standard contract where there are blanks to be filled in. In real estate, every word of your agreement is negotiable. You can ask your lawyer to go through the agreement to make sure there are no traps or loopholes.

• Make sure your memorandum of understanding or preliminary agreement clearly outlines the details of the transaction. The purchase price, type of property, due dates, type of deed, title evidence, possession date, taxes and utility bills covered, withdrawal conditions, extra facilities, etc. should all be mentioned at the time of the agreement in a written form.

• Your agreement should cover all aspects of the property such as parking areas, driveways, terrace area on a shared terrace, etc. Do not assume that it is included in the plot number allotted to you. Also, your agreement should describe the property in detail. It should cover the detailed description, and not just the street number.

• Insist on a contingency clause which lets you cancel the purchase under certain conditions. For example, if you are not able to obtain a loan or if the building or property is not in the same state as promised. You will have to have an inspection done, checking the condition of the building.

• Check all the aspects of warranties, fixtures and restrictions in order to avoid trouble once you have closed on the purchase.

• Protect yourself against late deliveries by signing a ‘time is of the essence’ clause. You can also draft a ‘liquidated damages’ clause to recover losses from any delay in delivery.

Conclusion
Buying a commercial property is serious business. If you check all of the above aspects in your agreement, your purchase should be hassle-free.

California’s Nonresidential Building Energy Use Disclosure Program Delayed for Buildings under 10,000 Square Feet until July 1, 2016.

Anyone who has ever shopped for major appliances knows about Energy Star. It is the emblem you see on all the new refrigerators, dishwashers, etc. in the showroom, letting you know that that machine has a certain energy efficiency rating. What you may not realize is that Energy Star is a program run by the U.S. Environmental Protection Agency, and it doesn’t just apply to appliances. Homes and commercial buildings are also rated under the Energy Star program.

This is important for real estate owners and entrepreneurs in California because the State passed Assembly Bill 1103[i] back in 2007, mandating that owners of non-residential buildings not only input their building’s energy consumption numbers (and other data) into the EPA’s Energy Star system, but also disclose that information to buyers, lenders and lessees of the entire building. The disclosure must be made to buyers or lessees at least 24 hours before execution of the sale or lease contract, and must be made to lenders at the time the loan application is submitted.[ii]

How do you know if you are required to comply with AB 1103? If you answer “yes” to the following two questions, you are required to comply:

  1. Is your entire non-residential building is for sale, lease, finance or refinance?
  2. Does your non-residential building fall into any of the following categories?
  • Assembly (A)
  • Business (B)
  • Educational (E)
  • Institutional – Assisted Living (I-1, R-1)
  • Institutional – Nonambulatory (I-2)
  • Mercantile (M)
  • Residential – Transient (R-1)
  • Storage (S)
  • Utility – Parking Garage (U)

The original deadline for complying with AB 1103 was January 1, 2010, but that deadline has been repeatedly pushed back.[iii] For buildings over 10,000 square feet, the law became effective on January 1, 2014, but on September 2, 2014, the Office of Administrative Law (OAL) approved the California Energy Commission’s proposal to delay implementation of the Nonresidential Building Energy Use Disclosure Program for buildings from 5,000 to 10,000 square feet until July 1, 2016.[iv]

If you own a building over 10,000 square feet that falls into one of the above categories and you are considering selling it, leasing it, financing or refinancing it, you have to comply with AB 1103 now. If you own a building between 5,000 and 10,000 square feet that falls into one of the above categories and you are considering selling it, leasing it, financing or refinancing it, you are off the hook until July 1, 2016.

[i] Codified as California Code of Regulations, title 20, §§ 1680-1684.

[ii] California Code of Regulations, title 20, § 1683

[iii] California Public Resources Code § 25402.10 authorizes the California Energy Commission to revise the compliance schedule.

[iv] http://www.energy.ca.gov/ab1103/documents/2014-09-03_emergency_reg_notice.pdf

CA’s Nonresidential Building Energy Use Disclosure Program Delayed

Anyone who has ever shopped for major appliances knows about Energy Star. It is the emblem you see on all the new refrigerators, dishwashers, etc. in the showroom, letting you know that that machine has a certain energy efficiency rating. What you may not realize is that Energy Star is a program run by the U.S. Environmental Protection Agency, and it doesn’t just apply to appliances. Homes and commercial buildings are also rated under the Energy Star program.

This is important for real estate owners and entrepreneurs in California because the State passed Assembly Bill 1103[i] back in 2007, mandating that owners of non-residential buildings not only input their building’s energy consumption numbers (and other data) into the EPA’s Energy Star system, but also disclose that information to buyers, lenders and lessees of the entire building. The disclosure must be made to buyers or lessees at least 24 hours before execution of the sale or lease contract, and must be made to lenders at the time the loan application is submitted.[ii]

How do you know if you are required to comply with AB 1103? If you answer “yes” to the following two questions, you are required to comply:

  1. Is your entire non-residential building is for sale, lease, finance or refinance?
  2. Does your non-residential building fall into any of the following categories?
  • Assembly (A)
  • Business (B)
  • Educational (E)
  • Institutional – Assisted Living (I-1, R-1)
  • Institutional – Nonambulatory (I-2)
  • Mercantile (M)
  • Residential – Transient (R-1)
  • Storage (S)
  • Utility – Parking Garage (U)

The original deadline for complying with AB 1103 was January 1, 2010, but that deadline has been repeatedly pushed back.[iii] For buildings over 10,000 square feet, the law became effective on January 1, 2014, but on September 2, 2014, the Office of Administrative Law (OAL) approved the California Energy Commission’s proposal to delay implementation of the Nonresidential Building Energy Use Disclosure Program for buildings from 5,000 to 10,000 square feet until July 1, 2016.[iv]

If you own a building over 10,000 square feet that falls into one of the above categories and you are considering selling it, leasing it, financing or refinancing it, you have to comply with AB 1103 now. If you own a building between 5,000 and 10,000 square feet that falls into one of the above categories and you are considering selling it, leasing it, financing or refinancing it, you are off the hook until July 1, 2016.

[i] Codified as California Code of Regulations, title 20, §§ 1680-1684.

[ii] California Code of Regulations, title 20, § 1683

[iii] California Public Resources Code § 25402.10 authorizes the California Energy Commission to revise the compliance schedule.

[iv] http://www.energy.ca.gov/ab1103/documents/2014-09-03_emergency_reg_notice.pdf

Employees versus Independent Contractors

From an employer’s standpoint, there are a lot of advantages to using independent contractors (IC) over hiring employees. With ICs you avoid payroll taxes, the minimum wage and overtime, meal periods and rest breaks, unemployment insurance, disability insurance, social security, even reimbursement of the IC’s for business expenses incurred in performing their jobs. Additionally, ICs are not covered under workers’ compensation insurance. With all of these cost-savings, employers are often tempted to misclassify their employees as ICs.

Differentiating Independent Contractors from Employees

Whether someone is an IC or an employee is a question of law based on an objective test. The rule of thumb is that an individual is an IC if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done; if the payer controls what will be done and how it will be done, the person doing the work is an employee. Regardless of how much freedom of action a worker has, what matters is that who has the right to control the details of how the services are performed.

Other factors the courts[i] look to include:

  • Whether the worker is engaged in an occupation or business distinct from that of the principal;
  • Whether or not the work is a part of the regular business of the hirer;
  • Who supplies the equipment, tools, and the place for the person doing the work;
  • The worker’s investment in the equipment or materials required by the job or the worker’s employment of helpers;
  • Whether the service requires a special skill;
  • Whether the work is usually done under the direction of the hirer or by a specialist without supervision;
  • The worker’s opportunity for profit or loss depending on his or her managerial skill;
  • The length of time for which the services are to be performed;
  • The degree of permanence of the working relationship; and
  • The method of payment, whether by time or by the job.

Unintentionally Misclassifying Employees as Independent Contractors

There are significant penalties for unintentionally misclassifying your employees as ICs. ICs get 1099s instead of W-2s. If you filed 1099s for your unintentionally misclassified employees, you will be liable for: (1) federal income tax withholding up to 1.5% of the employee’s wages; (2) 20% of the employee’s share of FICA taxes; and (3) the entire amount owed by you, the employer. Finally, you have no right to recover from the employee what is due to the IRS.

Failure to file required information returns, such as the Form 1099, doubles the percentage amounts. You must pay 3% for federal income tax withholding and 40% of the employee’s portion of FICA in addition to your own share of FICA. The IRS could also assess interest and penalties on the amount of your liability. In addition to federal taxes, you will be liable for unemployment taxes, including the percentage of tax that should have been withheld.

Intentionally Misclassifying Employees as Independent Contractors

For those who intentionally misclassify their employees as ICs, the penalties can be financially devastating. Intentionally misclassifying an employee could result in having to pay the full amount of income tax that should have been withheld; the full amount of both the employer and employee shares for FICA; plus interest and penalties based on far greater amounts than in the case of an unintentional misclassification.

In addition to the back taxes, criminal and civil penalties may be issued. If the IRS obtains a felony conviction against a person or company for “attempting to evade or defeat tax,” the fines are up to $100,000 ($500,000 in the case of a corporation), or imprisonment up to 5 years, or both, together with the costs of prosecution.

Under California law, the penalties for intentional misclassification include fines between $5,000 and $15,000 per violation of the law, in addition to any other fines allowed by law. The fines increase to between $10,000 and $25,000 per violation If you serially misclassify your employees, you will also be required to post notice of your violation in a prominent location on your website for one year. If you don’t have a website, you will be required to post notice of the violation in each location where the violation occurred, in a prominent area accessible to all employees and the public.

Conclusion

There can be real advantages to identifying and properly classifying independent contractors. Conversely, there are real and serious disadvantages to improperly classifying employees as independent contractors.  If you are going to classify your workers as ICs, it is best to first review their job descriptions with your attorney and a human resources professional.

[i] S. G. Borello & Sons, Inc. v Dept. of Industrial Relations, 48 Cal.3d 341 (1989).