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Employee Or Independent Contractor: What You Need To Know

The issue of whether an individual is an employee or an independent contractor for liability purposes is not always clear-cut. To resolve the issue, Florida courts apply a multifactor test, with the most important factor being the “extent of control” a company retains over how a worker does his job. For a small business, getting this issue right can mean the difference between success or bankruptcy.

 

In August 2016, Ric Keller, a partner at Hill, Rugh, Keller & Main, P.L., obtained a favorable ruling on this issue from the Fifth District Court of Appeals in a case entitled Middleton v. East Coast Fence.  The appellate court affirmed a summary judgment in favor of the employer based upon the general rule that an employer is not liable for the negligent acts of an independent contractor because the employer lacks control over the manner in which the work is performed.

 

In that case, the Plaintiff was driving on I-95 when a Ford pickup truck passed him, pulling a trailer behind it carrying a wood pallet. The pallet flew off the trailer and into the windshield, resulting in serious injuries and multiple surgeries. The Plaintiff argued that driver of the truck, a fencing subcontractor, was an employee of East Coast Fence for liability purposes based, in part, on the fact that he was allegedly required to wear a company t-shirt, place a company sign on the truck, and place a company sign on the customer’s property.

 

In contrast, East Coast Fence maintained that the driver was an independent contractor because it did not control how he did his job. East Coast Fence also pointed out that the worker supplied his own tools and transportation, did not receive employee benefits or a W-2 form, and was paid a flat rate by the job as opposed to an hourly rate.

 

Why are these factors important? The Florida Supreme Court, in Cantor v. Cochran, 184 So. 2d 173 (Fla. 1966), set forth the following factors to be considered in determining whether one is an employee or independent contractor:

 

  1. “The extent of control which, by the agreement, the master may exercise over the details of the work;”
  2. “Whether or not the one employed is engaged in a distinct occupation or business;”
  3. “The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;”
  4. “The skill required in the particular occupation;”
  5. “Whether the employer or workman supplies the instrumentalities, tools, and a place of work for the person doing the work;”
  6. “The length of time for which the person is employed;”
  7. “The method of payment, whether by time or by the job;”
  8. “Whether or not the work is a part of the regular business of the employer;”
  9. “Whether or not the parties believe they are creating the relationship of master and servant;”
  10. “Whether the principal is or is not in business.”

 

Id.

 

In Middleton v. East Coast Fence, the driver’s alleged use of company t-shirts and company signs were certainly relevant factors to be considered, but ultimately these factors were insufficient for the driver to be considered an employee for liability purposes, and the summary judgment in favor of East Coast Fence was affirmed.

 

It is critical for employers to successfully navigate this gray area of Florida law.  Whether it is drafting an independent contractor agreement, or litigating the employee/independent  contractor relationship, HRKM can help.