1099 employee contract workers have several crucial rights delegated to them. In fact, knowledge of these various rights ensures the proper classification of employees and independent contractors. Misidentifying these workers often exposes businesses to significant legal and financial penalties. Of course, many of these contractors use temporary work to start earning income. As an HR professional, avoid these penalties while providing work flexibility to contractors and work benefits to employees. Read on to discover several critical rights of 1099 contract workers.
Intellectual Property Rights
First, 1099 workers hold the right to intellectual properties. The Copyright Act of 1976 prevents companies from taking the intellectual property rights of their contractors’ work. These IPs can only be owned by the commissioning business if it qualifies as “work for hire,” or is stipulated in the worker’s contract. Work for hire must fit into one of several categories including parts of larger collectives, parts of motion pictures, translations, compilations, tests and related answer materials, among others. Surely, avoid legal repercussions by allowing contractors to keep their intellectual property rights.
Business Management Rights
Secondly, 1099 contractors retain the rights to manage their own business. Independent contractors don’t receive company benefits, so they’re responsible for their own insurance, pensions, worker’s compensation insurance, and any other benefits they wish to receive. Additionally, contractors must pay self-employment taxes that include both halves of FICA payments. Your payments to contractors won’t have taxes withheld, so submit form 1099-MISC as a report of your payments to them. Absolutely, ensure the fair treatment and independent business processes of your workers with their business management rights.
Employment Status Rights
Third, 1099 workers have the right to challenge their employment status at any time. Various federal agencies such as the Department of Labor and the IRS use their own definitions to differentiate between employees and independent contractors. For example, job location is one of these determining factors. While contractors work from their homes or independent locations, employees work at your requested location. Moreover, contractors possess the work’s required knowledge to begin with, while employees require training and onboarding. Determine the legality of your work arrangement by considering these factors and consulting with an employment attorney. Certainly, avoid legal penalties by respecting independent contractors’ employment status challenge rights.
Next, independent contractors have rights to work independence. Unless it’s a stipulation of their contract, independent contractors are generally not required to listen to the customers contracting them. Avoid workplace leadership confusion by keeping a hands-off approach when determining your contractors’ workflows and processes. In fact, over-involvement in contractor’s work process determinations often risks your classification as the worker’s employer. Definitely, maintain contractor independence and avoid leadership confusion by respecting their rights to workplace independence.
Contract Agreement Rights
Lastly, independent workers retain several contract agreement rights. Many contractors defend their various rights with a contract agreement that clearly defines your relationship to them. Maximize the legal protection of both parties by including project descriptions/durations, payment/termination terms, non-disclosure agreements, the roles/responsibilities of the job, and any applicable disclaimers. This way, contract transparency is ensured and a strong business relationship is formed. Of course, strengthen contractor relationships and provide transparency by working with your contractor on an agreement satisfying to both parties.
1099 employee contracts afford their workers a myriad of critical rights. For example, avoid legal repercussions by allowing contractors to keep their intellectual property rights. Second, ensure the fair treatment and independent business processes of your workers with their business management rights. Third, avoid legal penalties by respecting independent contractors’ employment status challenge rights. Next, maintain contractor independence and avoid leadership confusion by respecting their rights to workplace independence. Finally, strengthen contractor relationships and provide transparency by respecting your contractor’s right to a satisfying agreement. Of course, as long as you maintain these critical rights, you reap several staff augmentation benefits. When wondering about critical rights of 1099 employee contract workers, consider the rights described above.