Employment & Independent Contractor Relationships
Hiring employees or contractors without clear agreements is a recipe for conflict. Proper documentation ensures compliance and sets expectations. Understanding the difference between employees and independent contractors not only helps you stay compliant with labor laws, but also protects your business from unexpected liabilities and disputes.
In practice:
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A startup may misclassify contractors, believing they’ve avoided the obligations of hiring employees. In reality, many businesses don’t realize that what they call an “independent contractor” is, under the law, more accurately an employee. If a legal analysis were applied—considering factors like control over work, integration into the business, and dependence on the company—the balance often tips in favor of employee status. This misclassification can expose the company to back wages, unpaid overtime, tax penalties, and liability for employee benefits, leaving the business financially vulnerable.
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A company without an employee handbook may face inconsistent HR practices that lead to harassment or discrimination claims.
Risks of neglect:
Failure to comply with wage laws, classification rules, or termination procedures can lead to lawsuits, penalties, and reputational damage.
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How we help:
We draft employment agreements, contractor agreements, handbooks, non-competes, and severance packages. We advise on classification, wage and hour rules, and best practices—helping you avoid costly mistakes while supporting a productive workforce.