FernandezModule7

.docx

School

University of Nevada, Las Vegas *

*We aren’t endorsed by this school

Course

310

Subject

Management

Date

May 8, 2024

Type

docx

Pages

Uploaded by ChiefAtomBee33 on coursehero.com

Part One: During our work in the hospitality industry, many of us will become employees for a hospitality organization. Whether that is a server, waiter, front desk worker, golf shop attendant, or a sports arena worker. These are all different positions that would most likely be classified as an employee for an organization. However, some of us may find us still within the hospitality industry but working as an independent contractor. Well what is an independent contractor? According to the Gusto Editors at gusto.com, i “ An independent contractor is a worker who often owns their own business and usually enters into contracts with employers to perform a specific project, typically on a short-term basis ”. Whereas an employee for a business does not own the business they work at, neither do they necessarily get to pick their own hours. They agree with an employer to work at a regular basis for the employer. Some characteristics of an employee is they work at a time and place that is set by the employer, they are trained by the business in the specific practices of the business, they use the resources of the business to complete any tasks, and they are typically paid a salary or with an hourly wage. Some characteristics of independent contractors include working whenever they like, they are able to work with a multitude of different companies at once, they are hired for their knowledge in a particular area rather than trained by the company, and they control their methods of work. Knowing these distinctions can help us learn and help decide what we may want to do as hospitality students. Someone may want to be an employee over an independent contractor for a couple of reasons. One being that someone may just want to have a more regular work life. By that I mean, having steady and regular hours that are easily planned for. However, another person may rather be an independent contractor because they would like to have more freedom and flexibility with their own schedule.

Someone may also like that they have more control over what they do, rather than following whatever an organization may have them do as an employee. There are many differences in what an employee vs. independent contractor actually do, but there are also many differences between the two according to the law. One difference according to the Office of Child Support Services, ii “ For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes .”. Some of the other big differences are concerning the actual employment laws. The biggest one would beg that independent contractors are exempt from the minimum wage standard and the overtime pay standard that was set forth by the Fair Labor Standards Act (FLSA). This is because independent contractors have their own financial stake in their business. They pay their own expenses and earn their own money through the business. Employees however are covered by the Fair Labor Standards Act. Which for minimum wage states that an employee may not be paid less than the national minimum wage. Also, they must be paid at least the rate of one and one half the regular pay rate for hours that go beyond the forty-hour work week. However, these laws may be different depending on the state you live in. A real-life example I have of employees vs independent contractors comes from the golf course where I currently work. The employees, such as I, can teach golf on the property and have to charge a set amount determined by the management of the golf course. I also pay 25% of the lesson fee to the club. However, we have an independent contractor that uses the facility to teach separate from the golf course itself. He doesn’t have to follow the same regulations that I do as an employee. His contract allows him to use the course and he must pay 10% of his earnings to the golf course.

These two classes seem pretty different however, misclassifications do happen. According to Deel.com, iii “ In the US, up to 30% of employers have misclassified at least one worker ”. The misclassification that happens most often is when an employee is incorrectly classified as an independent contractor. Which can often be attributed to being accident but can also be done on purpose for different reasons. One being to avoid supplying the worker with things such as the benefits of being an employee. These may include insurance, Medicare, and can also include not wanting to pay as much in the payroll taxes. Doing this is against the Fair Labor Standards Act. Which ensures that employees are able to be paid minimum wage and have overtime pay. Consequences for this could be paying back wages, fines, lawsuits, and even jail time. As for the tax violations that occur when an employee is classified as an independent contractor, you don’t pay the FICA taxes, social security and Medicare taxes, and income tax that their income is subject to. So the consequences for this can be all of the FICA taxes that weren’t paid, up to 3% of the employees wages, and even a $50 fine for every tax form that was not filed for the employee. These are all major consequences for an organization, as well as it could potentially harm an organization’s reputation. People may not want to work their knowing that the company may not truly value the work their employees do. According to the US Department of Labor, they iv “ announced a final rule to help employers and workers better understand when a worker qualifies as an employee and when they may be considered an independent contractor under the Fair Labor Standards Act ”. The rule that they created was made to give a proper guideline for combatting employee misclassification. They also say that misclassification is a serious problem that is very much ongoing. The new rule for independent contractors ensures that the 6 key points are used to analyze a workers relationship with the employer. These six key points are opportunity for profit, the financial stake

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Recommended textbooks for you

Understanding Business

Management

ISBN:9781259929434

Author:William Nickels

Publisher:McGraw-Hill Education

Management (14th Edition)

Management

ISBN:9780134527604

Author:Stephen P. Robbins, Mary A. Coulter

Publisher:PEARSON

Spreadsheet Modeling & Decision Analysis: A Pract...

Management

ISBN:9781305947412

Author:Cliff Ragsdale

Publisher:Cengage Learning

Management Information Systems: Managing The Digi...

Management

ISBN:9780135191798

Author:Kenneth C. Laudon, Jane P. Laudon

Publisher:PEARSON

Business Essentials (12th Edition) (What's New in...

Management

ISBN:9780134728391

Author:Ronald J. Ebert, Ricky W. Griffin

Publisher:PEARSON

Fundamentals of Management (10th Edition)

Management

ISBN:9780134237473

Author:Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo

Publisher:PEARSON

SEE MORE TEXTBOOKS

Recommended textbooks for you

Understanding Business
Management
ISBN:9781259929434
Author:William Nickels
Publisher:McGraw-Hill Education
Management (14th Edition)
Management
ISBN:9780134527604
Author:Stephen P. Robbins, Mary A. Coulter
Publisher:PEARSON
Spreadsheet Modeling & Decision Analysis: A Pract...
Management
ISBN:9781305947412
Author:Cliff Ragsdale
Publisher:Cengage Learning
Management Information Systems: Managing The Digi...
Management
ISBN:9780135191798
Author:Kenneth C. Laudon, Jane P. Laudon
Publisher:PEARSON
Business Essentials (12th Edition) (What's New in...
Management
ISBN:9780134728391
Author:Ronald J. Ebert, Ricky W. Griffin
Publisher:PEARSON
Fundamentals of Management (10th Edition)
Management
ISBN:9780134237473
Author:Stephen P. Robbins, Mary A. Coulter, David A. De Cenzo
Publisher:PEARSON