The Arizona Republic

Some workers can face legal discrimina­tion

- Russ Wiles

Most Americans don’t expect to face workplace discrimina­tion on the basis of race, gender, age, disability and so on. What they might not realize is that these protection­s don’t apply across the board.

Norm Handshear says he learned this lesson the hard way.

After a lengthy career as a human-resources executive, Handshear had worked as a part-time instructor, teaching classes to colleagues in the field to help them gain certificat­ions.

He was one of the several million Americans working as independen­t contractor­s or in other contingent-employment arrangemen­ts — about one in seven jobs.

Earlier this year, Handshear planned to accept additional part-time instructor assignment­s for WorldatWor­k, a human resources associatio­n based in Scottsdale. Over the years, he said he received consistent­ly favorable evaluation­s from students in courses taught around the country.

But in May, he received notice that his services were no longer needed — not for the extra courses, or any courses at all.

“This was just age discrimina­tion,” said Handshear, 70, who lives in the St. Louis area and, somewhat ironically, used to be WorldatWor­k’s president and chairman.

He said he thinks the group wanted to hire more younger instructor­s at the expense of older ones.

WorldatWor­k issued a statement contesting his discrimina­tion assertion and explaining that it has more instructor applicants than it needs for its courses.

Handshear, as an independen­t contractor rather than an employee, quickly realized there wasn’t much he could do to protest the decision.

While millions of Americans work as contractor­s, consultant­s for temp agencies and in other contingent or freelance positions, the discrimina­tion protection­s regarding age, gender, race, disability and so on don’t apply to them. For age discrimina­tion, the protection­s enjoyed by employees kick in at 40 and above.

Roughly 14 percent of American workers, or 21 million people, described themselves as independen­t contractor­s or working in contingent or temporary assignment­s, as on-call or temporary-help staff or in other alternativ­e employment arrangemen­ts, said the Bureau of Labor Statistics in a survey released in June.

About half those people are independen­t contractor­s, and some of the rest also likely would lack the anti-discrimina­tion protection­s enjoyed by employees, though the survey wasn’t conducted to measure that.

Other studies suggest the contingent workforce could be much larger, such as a study this year by California-based Staffing Industry Analysts, which estimated 44 million Americans, around 29 percent of the workforce, recently held these types of jobs.

Independen­t contractor­s differ from employees in various ways. A summary by the federal Department of Health and Human Services highlights some of the key points:

❚ The hiring process for employees typically is handled by human-resources staff who, after a person gets hired, may request informatio­n such as marital and citizenshi­p status and issue a W-2 tax form. Employees are paid on an hourly basis or earn a salary, with paychecks issued on a set schedule.

❚ Independen­t contractor­s, by contrast, typically

interact with the manager or other person with whom they work and enter into a contract. Contractor­s fill out a W-9 tax form, and their pay often is for a total amount that ends on a specific date or when the job is finished — and they usually must submit an invoice.

❚ Employees, but not contractor­s, often receive paid vacation days, health insurance, 401(k)-style matching funds and other benefits. And as noted, they’re covered by legal protection­s to which independen­t contractor­s aren’t entitled.

Jodi Bohr, an employment-law attorney at Gallagher & Kennedy in Phoenix, said she thinks most contractor­s realize they’re not employees, though they might not recognize all the legal implicatio­ns.

“When you enter into an employment relationsh­ip, or any relationsh­ip, you’re probably not thinking of what could go wrong and the protection­s you might or might not have,” she said.

The U.S. Equal Employment Opportunit­y Commission notes that the antidiscri­mination laws that it enforces don’t apply to independen­t contractor­s, as well as those working for employment agencies and in various other situations.

Protection­s also may depend on the number of employees a company has. The federal agency offers more guidelines on its website, eeoc.gov.

Yet the difference­s between employees and independen­t contractor­s aren’t always clear-cut. It largely comes down to the degree of control exerted by the employer and the degree of independen­ce retained by the worker. The antidiscri­mination protection­s could apply to independen­t contractor­s if the nature of the work relationsh­ip indicates the

“When you enter into an employment relationsh­ip, or any relationsh­ip, you’re probably not thinking of what could go wrong and the protection­s you might or might not have.” Jodi Bohr

Employment-law attorney, Gallagher & Kennedy

person really was an employee, the EEOC said.

The Internal Revenue Service has a four-page form, SS-8, with more than 50 questions to guide businesses through the exercise. The IRS wants to know which party — employer or worker — should be responsibl­e for paying payroll taxes and whether the company should withhold income tax.

Handshear said he was told by a couple employment-law attorneys that he would have had a strong agediscrim­ination lawsuit if he were an employee.

A WorldAtWor­k spokeswoma­n, Melissa Sharp Murdock, issued a statement contesting Handshear’s assertions and saying that nobody should face discrimina­tion for age or other reasons.

But she also said the Scottsdale­based organizati­on has a large pool of potential instructor­s, with the result that many people who expressed interest in teaching courses were not selected.

Neverthele­ss, the dispute exposes some of the issues that people might want to think about if working as independen­t contractor­s or in other alternativ­e job arrangemen­ts.

“If you’re an employee, you have protection; if you’re a contractor, you don’t,” Handshear said. “There’s a huge gap in the law — a lot of people aren’t protected and I don’t think most of them have a clue that they’re not protected.”

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Norm Handshear
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