Q?May an employer discipline an employee based on information the employee publishes on a social networking site?

It depends.  Information posted on social networking sites, like Facebook, is easily accessible.  There are some court decisions which reason that employees do not have reasonable expectations of privacy claims in relation to postings.  In addition, employers may be allowed to conduct investigations regarding postings and potentially warn or discipline employees, even if the posting relates to off-work activity.  On the other hand, the publications may amount protected activity.  If, for example, the employee is complaining to other employees about terms and conditions of employment, the National Labor Relations Act may protect employee from retaliation or discipline.  This can be a fact-specific inquiry and a review by legal counsel is recommended if an employer is considering discipline based upon information published on the web or if an employee is subjected to such discipline.

Q?May an employer contest unemployment compensation where the employee is terminated for performance related misconduct?

Typically no.  Most states allow employees to recover unemployment compensation benefits unless the termination is a result of purposeful or willful misconduct.  Bad or negligent performance in the eye of the employer is generally not a sufficient basis for contesting unemployment compensation.  An employer should have evidentiary support of willful misconduct before contesting unemployment compensation benefits.  If an employer contests an employee’s unemployment compensation benefits for willful misconduct, both the employer and employee should have legal representation.

Q?Why can’t I just call a worker an independent contractor and not an employee and avoid paying wage taxes?

Employers want to hire independent contractors as opposed to employees for practical, financial and legal reasons.  From a liability perspective, employers may be held liable for the actions for their employees.  In addition, employers may be held liable under Title VII and other discrimination laws in relation to employees.  Title VII does not cover independent contractors.  Also, if a worker is an independent contractor, an employer can pay a set contract price, without the need to provide benefits.

Unfortunately, misclassification is fairly commonplace.  Just because an employer calls a worker an independent contractor does not mean that the worker is an independent contractor.   Depending on the jurisdiction, courts employ various tests to determine if a worker is an employee or an independent contractor, including a common law control test and/or a factor test which includes up to 20 factors.   Some courts do not even consider what the employer intended.  If a worker is misclassified as an independent contractor, the mistake can have extreme consequences.  For instance, the IRS can require that the employer pay FICA and FUTA taxes with fines as well as other penalties. The employer may also be subject to liability under the FLSA and/or ERISA, which could involve the assessment of damages and attorney’s fees. 

Employers should contact legal counsel to assist in the determination of whether the present or contemplated characterization of workers as employees or independent contractors is consistent with the applicable laws.