HRM 546 WEEK 1 ADVISORY MEMO EMPLOYMENT ISSUES
2020 -2021
Advisory Memo – Employment Issues
As a first-year Human Resource Specialist at "State of Estates" estate planning
firm, your boss (Will N. Trusts) presents you with the following two scenarios:
Scenario 1
Gary, an estate planner, works on a contract basis for our clients at "State of
Estates". On occasion, we contract Gary to handle a specific client for a specific
estate planning job. Per our contract with Gary for these specific clients, he is paid
commission on a weekly basis based on the overall fee received by the firm. When
working for these specific clients, Gary is able to use our office space, equipment,
and any supplies necessary to complete the job. To ensure consistent work product
and regulatory compliance, Gary submits his work to a supervisor, who approves it
and send it to the client on behalf of our firm. Recently, we had to lay Gary off in
the middle of a job and he filed for unemployment compensation.
What legal tests could be employed to determine whether Gary is an
independent contractor or employee?
There are 4 common tests to determine an employment relationship. Employers
should be aware that state and local variations of these tests also apply to any given
situation. The recurring theme in all these tests controls, and in different ways, they
all seek to determine the amount of control that an employer exerts over its
workers.
1. The Common Law Agency Test
This test requires consideration of 13 different factors, also known as the Reid
factors, which individually may not determine the character of the relationship, but
as a whole allow for an understanding of how much control an employer exerts
over a particular individual.
2. The Economic Realities Test
2020 -2021
Advisory Memo – Employment Issues
As a first-year Human Resource Specialist at "State of Estates" estate planning
firm, your boss (Will N. Trusts) presents you with the following two scenarios:
Scenario 1
Gary, an estate planner, works on a contract basis for our clients at "State of
Estates". On occasion, we contract Gary to handle a specific client for a specific
estate planning job. Per our contract with Gary for these specific clients, he is paid
commission on a weekly basis based on the overall fee received by the firm. When
working for these specific clients, Gary is able to use our office space, equipment,
and any supplies necessary to complete the job. To ensure consistent work product
and regulatory compliance, Gary submits his work to a supervisor, who approves it
and send it to the client on behalf of our firm. Recently, we had to lay Gary off in
the middle of a job and he filed for unemployment compensation.
What legal tests could be employed to determine whether Gary is an
independent contractor or employee?
There are 4 common tests to determine an employment relationship. Employers
should be aware that state and local variations of these tests also apply to any given
situation. The recurring theme in all these tests controls, and in different ways, they
all seek to determine the amount of control that an employer exerts over its
workers.
1. The Common Law Agency Test
This test requires consideration of 13 different factors, also known as the Reid
factors, which individually may not determine the character of the relationship, but
as a whole allow for an understanding of how much control an employer exerts
over a particular individual.
2. The Economic Realities Test
