Can an Indemnification Clause Be Enforced when the Company Misclassified a Contractor

[jk]

This is the first that you've brought up the potential for your contract being terminated. Up until now everything you asked was with respect to a lawsuit being filed and the enforcement of the indemnification clause, which I assumed would include the termination of your contract but I don't like to make assumptions.

If you think that losing your job/contract is imminent then I see no reason not to file the SS-8 now with the IRS to request a determination of whether you've been misclassified, rather than waiting until you get terminated. I understand that those requests can take 6+ months to be processed.

the rules the irs applies are quite different than the rules, at least regarding unemployment benefits, New Jersey applies. I can see a lot of situations where the irs would consider a person to be an IC but the opposite in New Jersey. Budwad may find the irs allows him to be considered to be an IC (I don’t know enough of the specifics to be able to venture an accurate guess) but in New Jersey with their more strict rules, be considered to be an employee.

If is concerned about unemployment benefits, it’s what New Jersey determines that will make the difference since the UI program is controlled at the state level.

Since New Jersey rules are more restrictive, if the irs determined he is an employee it would also apply to New Jersey but if the irs says he can be considered an IC, he will still need a state level determination

[bcr229]

the rules the irs applies are quite different than the rules, at least regarding unemployment benefits, New Jersey applies. I can see a lot of situations where the irs would consider a person to be an IC but the opposite in New Jersey. Budwad may find the irs allows him to be considered to be an IC (I don’t know enough of the specifics to be able to venture an accurate guess) but in New Jersey with their more strict rules, be considered to be an employee.

If is concerned about unemployment benefits, it’s what New Jersey determines that will make the difference since the UI program is controlled at the state level.

Since New Jersey rules are more restrictive, if the irs determined he is an employee it would also apply to New Jersey but if the irs says he can be considered an IC, he will still need a state level determination

Thank you. I did do a quick search through the NJ web site to see where he could start the process to request a determination, but I didn't find anything so I didn't mention it.

[budwad]

Um, rejection since they didn’t pay anything in maybe?

I’m guessing you haven’t read all New Jersey case law onnthe subject. Here is an article supporting my position on test c of the abc test and proving your position flat out wrong

There is nothing in that article that contradicts anything I Posted. In fact it upholds the ruling of the NJ Supreme Court ruling in Sleepy’s with respect to (C) in the test. I have worked 36 plus hours per week for over 16 months. That by federal and state standards is full time employment. I don't work for anyone else and my business was shut down years ago. This is not anything like the retirees that worked for the fireworks company.

So what is your point?

[jk]

There is nothing in that article that contradicts anything I Posted. In fact it upholds the ruling of the NJ Supreme Court ruling in Sleepy’s with respect to (C) in the test. I have worked 36 plus hours per week for over 16 months. That by federal and state standards is full time employment. I don't work for anyone else and my business was shut down years ago. This is not anything like the retirees that worked for the fireworks company.

So what is your point?

Yes, there is. I even quoted the salient portion. You argued that since you did work for only this employer test c failed ergo you were an employee. I quoted the section from that site that stated, specifically if you are a retiree test c wouldn’t apply.

Do you recall writing this?

(C): I was retired and had shut down my business years before they approached me to take the position. I don't work for anyone else and this position is my only source of earned income.

from the site I linked:

Garden State Fireworks

is that the panel found, without directly addressing the issue, that pyrotechnicians who were retirees could satisfy part C. Plainly, a retiree, by definition, is not engaged in an “an independently established trade, occupation, profession or business.” Nevertheless, if the panel would have addressed the issue, it may have concluded, based on Carpet Remnant, that the retirees were not employees because, being retired from employment, they were not economically dependent on the fireworks company and, thus, would not join the ranks of the unemployed upon termination of the challenged relationship.

you stated you are retired so unless you can find where the state made some additional clarification, you fit the bill. They are basing it on the fact of a retiree having income from typical sources a retiree would collect from. It’s a stupid decision as it is saying if you have other income you aren’t afforded the same protections as workers who do not have retirement types of income.


And the point is obviously you had not read all of the caselaw available or you would be aware of the issue when you are retired being treated differently.

In the bigger picture it was ruled that it didn’t require the person to actually have an active business or that they provided their services to more than one client at any time. The ruling reflected what I stated; if the activity is one that a person could provide to others, then test c is met. Their example dealt with nurses. It was stated that a nurse can offer the same services provided at the client in question to other clients, that fulfilled test c.

While

Trauma Nurses is an example of a case where an appellate panel found that part C was satisfied where the putative employees were able to provide the same service in the same industry following the conclusion of the relationship with the putative employer, the panel in Trauma Nurses did not hold that providing the same service in the same industry is a necessary component of part C.

you also will not find a requirement such as test c in federal law either. Under federal law they don’t dont care if you are unemployed or not if you leave the single client. It is truly irrelevent to a true determination of ic or employee status.



I have to admit New Jersey’s rules are pretty screwed up and they make their decisions on irrelevent issues. You may fit the bill of being an employee under New Jersey standards. I don’t have all the facts so I can’t reallly venture a guess but New Jersey standards are quite different than federal standards.


To your statement regarding being a full time employee:

Under the FLSA there is no definition of full time or part time employment in federal (and probably nj) law. You are employed or you aren’t. Full time and part time are employee imposed classifications for their own purposes.


The definition of full time or part time is only pertinent to the IRS and only for the purposes of employer shared provisions of the ACA. Unless the ACA becomes an issue for you, the full time status is irrelevant. It doesn’t do anything regarding the determination of whether you are an ic or employee. It merely addresses employer shared provisions if you are an employee and you are classified, within the ACA, as a full time employee.

[budwad]

Your interpretation of the fireworks case is to say the least extremely narrow. Here you have some retirees that work for 1 to 3 days a year for the company. That is a far cry from someone working 36 hours a week for over a year.

Then you hold that because the retiree is retired, they cannot reenter the work force and they are a retiree for ever. That is not the way it works.

When someone that was once retired reenters the work force they are no longer retired. If they lose their job, they indeed enter the realm of the unemployed.

If you have some law or case law that says a retired person can not reenter the workforce, please share it.

It really doesn't matter in my case because even if the C test prevails for the employer (I say it doesn't), the A and B test fails. and the employer has to satisfy all three tests.

[jk]

Your interpretation of the fireworks case is to say the least extremely narrow. Here you have some retirees that work for 1 to 3 days a year for the company. That is a far cry from someone working 36 hours a week for over a year.

Then you hold that because the retiree is retired, they cannot reenter the work force and they are a retiree for ever. That is not the way it works.

When someone that was once retired reenters the work force they are no longer retired. If they lose their job, they indeed enter the realm of the unemployed.

If you have some law or case law that says a retired person can not reenter the workforce, please share it.

It really doesn't matter in my case because even if the C test prevails for the employer (I say it doesn't), the A and B test fails. and the employer has to satisfy all three tests.

My interpretation? I quoted what was written in the decision.

As i also said, to me, it is a very poor reasoning to use the determination they did. To me, it has nothing to do with determining the status of employee or ic


but they said what they said

I also stated that I don’t know enough about your situation to even guess at how it would be ruled. Over all, New Jersey seems apply some very odd rules to the situstion.
Most of them are simply wrong when trying to actually determine if a person is an employee or an ic

but it’s your state. You have to live with those rules. It may benefit you. I really don’t know

but getting back to your real issue;

if sued you can assert a defense that you were actually an employee. Since an employer cannot make an employee assume liability for costs assigned to the employer, the clause in question is unlawful and as such, not enforceable. If there is no savings clause that may result in the entire contract being tossed. If there is a savings clause, it’s lkely only the unenforceable clause would be removed.

Of course to make a claim yiu are really an employee you will have to prove that as it is to asserting the claim. You said you have no doubts you can do that so you should win.