7 Common Questions About Hiring Independent Contractors in Florida
What Florida Law Says About Independent Contractors
Many of our clients come to us with questions about independent contractors, including businesses interested in hiring them as well as the contractors themselves. Both recognize that it’s often beneficial to have some type of independent contractor agreement on hand (more on that below), but employers in particular need to proceed carefully. This is because improperly classifying employees as independent contractors can come with harsh fines and other penalties. This guide will break down the requirements for classifying workers as independent contractors in Florida and other related issues.
1. What is the Legal Definition of an Independent Contractor in Florida?
Unfortunately, Florida law doesn’t offer a single, clear definition of what constitutes an independent contractor. There aren’t any state agencies that you can ask to determine worker status, either. Instead, the state of Florida provides different “tests” to help courts and state agencies decide whether an individual is working as an employee or an independent contractor for purposes of employer liability, whistle-blowing, workers’ compensation, unemployment compensation, or to enforce wage and hour laws. Most of these tests focus on determining the amount of control and oversight that an employer has over their worker. The greater the amount of control that an employer has, the more likely it is that they’re an employee and not an independent contractor. In addition to these tests, Florida courts also typically follow federal guidelines for independent contracts, with equal weight given to all possible criteria.
2. What are the Benefits of Hiring an Independent Contractor Instead of an Employee?
There are many reasons for a business to turn to independent contractors instead of employees for a given job. For example, they’re incredibly useful for performing tasks outside of the scope of your employee’s usual responsibilities. Independent contractors in Florida are also responsible for their own taxes, which means that employers are free from the burden of employment taxes. There’s no need to withhold taxes from their paychecks, either. Another reason for their popularity is that they are exempt from company benefits and certain wage and hour laws. They’re unable to sue for relief under the Private Whistleblower’s Act as well.
3. What are the Standards for Determining if Someone is an Independent Contractor or an Employee in Florida?
- How much control the employer has over the individual’s work
- Whether the individual has a distinct profession, occupation, or business
- How much supervision the individual will have
- The job’s required skill level
- Whether the individual uses their own tools and/or worksite
- The duration of employment
- Whether payment is calculated hourly or per-job
- Whether the work is a part of the employer’s regular business
- The agreed-upon relationship between the parties
- Whether the employer operates an active business
4. How is Employee Misclassification Enforced in Florida?
In Florida, employee misclassification is enforced by multiple agencies and organizations, including the Department of Financial Services and the Department of Economic Opportunity, in addition to the Chief Inspector General and our state judicial system. Investigations are pursued aggressively. They are most frequently triggered by alleged independent contractors that either file complaints against their employers or attempt to file claims for workers’ compensation, reemployment assistance, or other benefits.
5. What are the Penalties for Misclassification in Florida?
Florida businesses that misclassify employees as independent contractors can face fines and other severe penalties under the law, even if the misclassification was unintentional. These fines range anywhere from $2,500.00 to $5,000.00 for each misclassified employee. Those numbers can add up frighteningly fast. For more on the dangers and penalties associated with employee misclassification, you can .
6. Are Workers in the ‘Gig Economy” Employees or Independent Contractors under Florida Law?
While suggests potential changes in the future, the majority of jobs in the gig economy fall under the umbrella of independent contractor work in Florida, with different rules for transportation network companies (TNCs) and marketplace platforms. The Florida Statutes define TNCs as organizations that use digital networks to connect riders with drivers to provide prearranged rides. However, TNCs are explicitly not taxicab associations or for-hire vehicle owners. They don’t own, control, operate, direct, or manage the vehicles or drivers that use its network outside of the terms of their written contract. Their drivers can be classified as contractors so long as the relationship is agreed to in writing and the TNC does not set their working hours, prohibit them from using competing networks, or from finding employment elsewhere.
Marketplace platforms, on the other hand, are defined as entities that operate in Florida and connect users with individuals who perform temporary household services, and who exclusively accept service requests through an app, website, or other systems. Much like with TNCs, marketplace platforms can’t exercise much control over their workers outside of the terms of their contract. Specifically, these platforms must not dictate the hours that their workers must be available to work, nor can they prevent them from using competing platforms or from engaging in other occupations. The marketplace contractor must also take on the majority of the contractor’s expenses incurred while performing these services, and they are also responsible for paying taxes on the contractor’s income. Their contract must also set forth that the contractor is, in fact, an independent contractor.
7. Does Florida Require Independent Contractors to Enter Into an Independent Contractor Agreement?
Florida law might not require a written independent contractor agreement, but it’s better to have one than not. Oral and implied contracts might seem like a more convenient option, but getting your deal in writing is the only way to ensure that your terms are enforceable in a court of law. It’s a good way to minimize potential disputes, too.
Attorney-drafted employment or independent contractor agreements are paramount to safeguarding your business from potential lawsuits or liability. Relying on free online templates or verbal agreements is, at best, gambling with your business’s assets. Call (727) 279-5037 or visit our flat fee service page for contracts written by a local Florida business lawyer.
Image Source: Person Holding Silver Pen Signing Photographers Signature by energepic.com from Pexels.
FL Patel Law PLLC is a boutique business law firm dedicated to entrepreneurs and companies.
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