Independent Contractor or Employee?

Instructions

Assignment 1: Independent Contractor or Employee?

This assignment allows you to demonstrate mastery of the following course outcomes:

1. Analyze employment related laws, and ethical considerations their application, and implications in the workplace
2. Evaluate rights, obligations, and liabilities in the employment process and relationship.
3. Evaluate compliance with current laws and regulations related to safety and fairness in the workplace.
4. Effectively communicate to internal and external audiences the principles and application of employment laws and ethical considerations in the business environment.

Schultz v. Capital International Security, Inc.

460 F.3d 595 (4th Cir. 2006)

Facts: The plaintiff-agents provided security services for Schultz and his family at his Virginia residence in twelve-hour shifts. The agents were paid a daily rate for each shift; they received no extra pay for overtime. The agents had a command post at the residence, from which they observed security camera monitors, answered the telephone, and kept a daily log of all arrivals and departures. They also made hourly walks of the property, ensured that members of his family were safe when departing and arriving, sorted mail, and performed various tasks upon request of his family. In addition to their security duties, the agents were responsible for having the household’s vehicles washed and fueled, making wake-up calls, moving furniture, and doing research on the Internet.

Schultz’s long-time driver and travel agent, Sammy Hebri, formed a company called Capital International Security, Inc. (CIS). Hebri started CIS for the purpose of becoming Schultz’s security contractor.

Hebri sent a memo (dated July 24, 2002) to the agents directing them to obtain their own private security business licenses from the VDCJS and individual liability insurance so they could be classified as independent contractors.

Issue: The issue is whether the bodyguards were considered to be employees or independent contractors for the purpose of the Fair Labor Standards Act.

Action: You must respond to all questions below. You must use at least three sources from the class materials and do independent research. Do not combine the five discussion questions and please use the outline below for your paper. Use of the outline will help you organize your research and comments and ensure you do not miss any questions that must be addressed. Your responses to each question must be in narrative format not bullets. Use the headings below to organize your paper.

Question 1 – Summary:

1. 1. Summarize the relevant facts of the case. What is your opinion on the outcome of this case?
   2. Go to: https://caselaw.findlaw.com/us-4th-circuit/1053551.html and respond: What was the actual outcome? Why? Be specific.

Question 2 – Classification Test:

1. 1. In the above case, what kind of classification test could have been used and what would be the result? (https://www.workerclassification.com/classification-tests)

Question 3 – Virginia State Law:

1. 1. Under Virginia state law would the result be the same, why or why not? Be specific.
   2. Discuss if any of the Virginia exemptions for employee classification apply in this scenario or not? Be specific.

Question 4 – Classifying Workers:

1. 1. Under Virginia law, are independent contractor’s eligible for worker’s compensation? Why or why not? Be specific.
   2. What are the consequences for a Virginia employer misclassifying an employee as an independent contractor? Be specific.
   3. What specific benefits would an employer gain by such misclassification? Be specific.

Question 5 – Three Preventive Steps:

1. 1. Identify and discuss in detail three steps that could have prevented the type of situation discussed in the scenario from happening again. The steps should be feasible, clear and legal.

Formatting directions for this assignment #1

• Use the bold headings found in the outline above in your paper to denote the different questions.
• Paper must be in APA 7.0 edition style, narrative format (not in bullet points nor PowerPoint).
• Include a cover page which should have student name and title of your paper.
• Include a reference section at the end of your paper with at least 3 citations/references in APA 7.0 style format.
• Use a word-processing software and saved with a .doc, .docx, or .rtf extension. Do not submit in a pdf format.
• Upload the paper to your Assignments Folder by the due date.
• The paper is to be posted in Assignment #1 drop box.
• Note: Full Citation of Authority at end of entire paper. Citation of authority must be accessible to the instructor without having to pay for it.

The grading rubric for this assignment is in the Assignment Folder, or can be opened by clicking on the ‘Assignment #1 Grading Rubric’ tab in the lower right corner of the screen if you opened the Assignment in Content.

Reference Materials

1. https://www.dol.gov/agencies/whd/flsa
2. https://caselaw.findlaw.com/us-4th-circuit/1053551.html
3. https://www.workerclassification.com/classification-tests