King & Ballow

King & Ballow

I. Independent Contractor Status

Any discussion of the laws affecting newspaper circulation must include an analysis of the fundamental distinction between "employees" and "independent contractors." Generally speaking, the relationship of employer and employee exists when the person for whom the services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished, but to the details and means of the work by which that result is to be accomplished. In other words, an "employee" is subject to the will and control of the employer not only as to what shall be accomplished but also how it shall be accomplished. An "independent contractor," on the other hand, is not subject to direct control over his (or her) daily activities, except as to the desired end result of the overall job.

State and federal statutes impose various duties on the employer-employee relationship, such as unemployment insurance taxes, wage and hour regulations, and workers' compensation requirements, while providing exemptions from those obligations for a company's relationship with independent contractors. In addition, courts and legislatures historically have held employers liable for the negligence of their employees, while holding independent contractors responsible for the financial consequences of their own actions. As a result, the ability to use independent contractor workers can result in a significant cost savings for any company.

However, not just any worker can be an independent contractor; it is a status conferred only when certain tests are satisfied. In fact, an employer often has no option because of the nature of the work to be performed and must use employees. Fortunately, because newspaper carriers tend to work unsupervised and away from company facilities, it is possible to design a distribution system that satisfies the tests for independent contractor status. As a result, many newspaper publishers have made the business decision to distribute their product through independent contractor carriers who perform their distribution services under a written contract with the newspaper company.